Apsattv
28-06-2008, 01:37 AM
From Marketing Manifesto June 2008
The new MySky HDi service arrives next month, although only just -- installation starts from July 29.
The MySky HDi is a Personal Video Recorder (PVR), just like the original MySky box which launched two and a half years ago (December 2005). If you’re already a MySky user (as some 30,000 Kiwis are), you probably won’t get too excited about the new box — even though the MySky HDi has more enhanced capabilities than the original, most won't be enabled at launch.
In practice, then, there aren't a lot of reasons for existing subscribers to upgrade right away -- except of course for the stunning High Definition output (and 5.1 Surround Sound) that the new box delivers if you have an HDMI-capable TV set. However (as noted below) Sky is pricing the new service very attractively, to encourage existing MySky subscribers to keep their existing box and add on the new box as a second unit.
The new box has twice the theoretical capacity of the original MySky (320 gigabytes vs 160 GB); in practice, however, consumers can only access 160GB to store recorded programmes (vs 100GB on MySky V1.0) — the remainder is for operating system software and to store future pay-per-view programming downloaded to the box.
The MySky HDi comes with four tuners, but only two are enabled in the first release — so initially you’ll be able to record two Sky channels at once, just as the existing box offers. You’ll have to wait for the additional tuners to be enabled via software upgrades at a later date.
If you’re an existing MySky subscriber, you’ll be able to switch to the new box for a one-off fee of just $49; if you don’t already have a MySky box, you’re up for a one-off fee of $599 or a monthly $15 rental (not including the cost of any Sky subscription).
At launch, High Definition offerings will be available for Sky Sport 1, Sky Sport 2, Sky Movies, Sky Movie Greats — and TV3, offering HD content where available through the MySky HDi platform (as well as through Freeview|HD).
You’ll pay an extra $10 a month to access the High Definition content — unless you keep your existing Sky box as well as the new MySky HDi. Then the extra fee is waived (but you’ll pay $25 a month for the additional "multiroom" subscription to Sky). That's an enticing price point, low enough to encourage existing MySky subscribers to double their viewing pleasure.
The “i” in MySky HDi refers to interactive offerings — in about 12 months (E&OE) the box will be enabled to receive internet-delivered television (IPTV) from Sky.
At launch date, the MySky HDi focus is on High Definition, with Sky promising that at launch around 60% of the movies screening on the movie channels will be in HD, expected to be around 90% by the end of 2008.
Sport is also a no-brainer for HD, and some 500 hours of HD sporting content will be screened on Sky Sport in August, with the amount continuing to grow as more content is provided in that format. Rugby, League, Soccer, Motor Racing, Cricket and many other sports will be offered in HD, from both international and many local fixtures.
In a hint of things to come, Sky is promising that the 2010 Winter Olympics will see Prime go HD with 12 hours a day of Olympic content (and four channels on Sky offering Olympic content 24 hours a day). By the London Summer Olympics of 2012, Prime will be carrying 22 hours a day of HD Olympic content, whilst at least 8 Sky channels will be covering the action 24 hours a day.
The MySky HDi represents evolution rather than revolution — more goodies, but basically the same service already available via MySky. The most important difference, however, is in marketing of the new service. Sky deliberately held off promoting MySky beyond its launch phase, waiting for the next generation box that it knew was just around the corner (although, as is the way with technology, delayed from its original launch date). Even so, the company installed around 30,000 MySky boxes.
This time, the gloves are off. The MySky HDi will get some serious promotion, which will inevitably drive significant penetration. And that in turn means it's time for the advertising industry to get to grips with the game-changing nature of personal video recorders. So herewith some fast facts about PVRs and what happens in PVR-enabled households:
According to a March 2006 US study from Nielsen Media Research:
10% of total viewing (and 17% of primetime viewing) in PVR homes Monday-Wednesday was playback of time-shifted content
Two-thirds of all playback was of content recorded earlier the same day
Another US organisation, Magna Global, conducted a research study based on custom data from Nielsen Media Research. Among the key findings: there are substantial differences among viewers who have had a PVR for less than one year vs. those who have owned one for a year or longer. Unsurprisingly, people tend to use the PVR features more frequently as they become more familiar with the technology.
Other insights from that study:
PVR owners watch more television. 29% of viewers with PVRs for longer than a year said they watch more broadcast television than before they had a PVR.
Approximately half of respondents said they pause live shows often or always.
More than half of PVR owners have either recorded or watched a recorded program within the last 24 hours.
About 80% say they watch a minimum of three-quarters of programs they record.
Half of all PVR users sampled automatically record five or more programs each week.
36% watch recorded programs in primetime, while 18% watch these programs in the 4-8PM daypart.
And one last US study (lest we overwhelm you with statistics), Forrester's September 2004 analysis of PVR consumer behaviour, "Inside The Mind Of The PVR User" (based on its survey of 588 PVR users) reveals that:
Consumers with PVRs spend almost 60% of their TV viewing time watching recorded or delayed programmes.
PVR owners rated their improved enjoyment of TV at an average 4.4 on a 5-point scale.
Consumers say they love the control that PVRs give them.
And (the main reason that Pay TV operators like Sky love PVRs) less than 2% of people who own PVRs have stopped using them.
Real-time viewing drops by 60% with PVRs, but programs like the evening news and sporting events are among the programs that retain significant real-time viewing.
The Secret Life Of PVR Households
People who live in PVR households are different. We've told you this before (September 2004), but for the benefit of our newer readers, a refresh. Those who are the proud possessors of PVRs indulge in:
Buffering
Moving favourite shows to a more favourable time slot. Common examples are evening soaps that people can shift by a short time to accommodate family functions like dinner or bathing the kids. (‘I normally bath the kids just when Shortland Street is on. Now I record it every day and watch forty minutes later’).
Series Linking
The ability to bookmark a particular programme or series of programmes is the essence of the PVR. (‘I never worry about missing Grey's Anatomy now, in fact I'm not sure I can even remember when it's on’). This is a feature closer to PVR functionality and depends on advanced EPG information.
Grazing
Scanning a complete day or evening’s viewing via the on-screen programme guide and recording a selection for later viewing. Friday evening schedules are popular with users, who use the rest of the weekend to catch up on the recorded shows. (“While my wife is getting dressed to go out, I grab the best of the night's viewing to watch on Saturday mornings”).
Stacking
Using the PVR to collect a number of episodes for a binge viewing session. (“I had the whole of this week's Days of Our Lives programmes, and watched all five episodes in one weekend”).
Archiving
Dropping content from the PVR onto a DVD on connected external equipment - this is most often used to give copies to other people.
Compressing
Primarily a sports related concept, people use the PVR to record an event (football and rugby games seemed the most commonly cited examples) and create a ‘highlights’ version - watching a 90 minute game in 20 minutes.
Extending
The flip side of ‘compressing’, more sophisticated users watch a live game through the PVR, re-winding and re-playing the key events repeatedly, and catching up with real time at the half way break. Some people talk about taking two hours to watch a 90 minute game.
Pausing
The pausing of live TV usually starts out being the least used of all the new functions (because it represents a departure from the well-understood recording paradigm). This zapping in and out of the recorded content requires a more committed understanding on the part of the consumer of the timing and scheduling of programmes. (‘we now sometimes use the ad breaks to catch up to live, but it is fiddly’).
Ad Sampling
PVR users became sufficiently adept at using the multi-speed fast forward functions to seldom watch the ads before or during programmes, with one caveat: viewers halt the fast forward process to watch ads they enjoyed. (‘we almost never watch an ad in our house any more unless it is one the kids like’).
Well, yes, what about the ads?
The US Forrester research study (referenced above) found that three out of four PVR users watch some ads at least occasionally, with movie ads and ads for upcoming programs faring best.
Consumers with PVRs say they watch less than one in 10 ads about credit cards, long-distance carriers, car dealers and banks. The average PVR user sees only 46% of the ads in the programs he watches.
Those numbers, from 2004, are still relevant today. April 2008 research from the leading US PVR operator TiVo reveals that five of the top ten ads most watched during PVR replay in April were movie trailers. The other five (and their positions in the Top Ten):
3. Ford Auto & Truck
5. Glaceau Flavored Vitamin Water
6. Apple Macintosh Computer
8. Apple Macintosh Computer
9. Crest Whitestrips/Whitening
Interestingly, there isn't necessarily a direct relationship between the popularity of the ads and the popularity of the programmes within which they appear. The highest rated April ad spot was for the film “Forgetting Sarah Marshall”, which aired during an episode of NBC’s The Office, a show which didn’t even make the Top 10 Programme list.
As we've noted before, consumers are not specifically setting out to avoid ads. The PVR simply makes recording TV shows so painless that the poor old PVR family usually has a backlog of recorded content, and is fastforwarding through adbreaks simply to get through as much content as possible within the limited time that today's societal pressures allow for leisure. Up to twenty precious minutes can be reclaimed from every hour simply by skipping through peripheral material - credits, station IDs, advertising et al. However many viewers continue to watch ad breaks ‘as live’ – at least until a ‘bad ad’ reminds them of the opportunity to skip through and catch up.
The PVR paradigm-shuffling has massive implications for broadcasters, not just advertisers. Traditionally, programmers have launched new programmes by placing them just before or just after existing top-raters on the schedule. Now that viewers are time-shifting those top shows, broadcasters need to find other ways to promote the new stuff. On today's US network television, you'll find "coming up next" promos embedded deep within each programme - a step in the right direction, but not much use if you're watching a show hours or days later. PVRs are miraculous, but time travel is not yet built into most models.
Another major issue for both broadcasters and advertisers: grazing reduces. PVR households can barely keep up with the backlog of programmes they want to watch, and have less time available for just cruising through the channels. Result: drooping ratings for not-quite-ready-for-primetime shows.
British research from Thinkbox (based on BSkyB's Skyview audience panel of 20,000 Sky Digital homes) provides some comfort for the beleaguered advertising industry:
'People don't get PVRs to avoid ads; they get them to find content they want to watch. Owners are not militant anti-commercial ad avoiders. When a home gets Sky+ [the UK equivalent of MySky], 14% more commercial TV is watched than before (20 minutes more a day), about 87% of viewing is still to live broadcast and, of the viewing that is timeshifted, 44% of ads are watched "as live". The net effect of all this is that Sky+ owners see about 6% more ads at normal speed than they did before they had it.
'Of course some people do fast-forward through ad breaks, but not all of the time. Perhaps "speed watching" is a more appropriate phrase than “fast-forwarding” as demonstrated by Thinkbox’s engagement study, which filmed people watching television in their homes. [Thinkbox] witnessed extraordinary levels of concentration on the screen amongst those with their thumbs on the accelerator. And Duckfoot Research & Development established that as long as you’ve already seen a TV ad once, your recall of this ad when seen at 30 times faster than normal is about 65% of the level that it would otherwise have been at normal speed. So, for advertisers, "speed-watching” has real value.
'Ads are also spotted and rewound to watch fully. Thinkbox found there was a greater appreciation of good ads and of the timeliness of some advertising, especially on live TV: for example retail sales, films and trailers. PVRs renew their owners' interest in the relevance of advertising.
'There will always be a minority who wish for an ad-free media world but the research showed PVR owners were more circumspect. Many acknowledged advertising's funding role and rejected the notion of paying more for ad-free TV.'
So what can advertisers do?
A 2005 MEC MediaLab UK study noted six possible strategies emerge in response to the arrival of PVRs. Not all of them are viable, and individual advertisers’ circumstances will dictate appropriate priorities.
1. Ignore. The major justification for a ‘head in the sand’ approach would be that the early adopter behaviour is just that – and won’t extend to the majority. However PVR technology is intuitive, requires no disproportionate motivation or skill, and whereas not everyone will adopt all functions, a broad majority will routinely avoid advertising.
2. Augment. If there’s a marginal decline in TV advertising availability then a sensible strategy would be to diversify a media portfolio to include other channels. PVRs present another reason to do this – although in practice this only continues a well established trend. TV-only media strategies are now in a minority.
3. Engage. If there’s less audience availability, we should make the most of the availability that remains. In particular there is an issue for ‘low engagement’ categories such as finance and a clarion call for these advertisers to look at developing higher-engagement ads that viewers will accept as entertainment rather than skip as intrusion. The natural focus for this is with the creative expression, yet there are a number of media implementation aspects: we can expect high value live programming – least likely to be ‘PVR-ed’ – to become more valuable.
4. Enhance. The same technological revolution behind PVRs also allows us to take the viewer out of the linear broadcast stream via TV interactivity ('press the red button for more information'). In the UK the advent of PVRs allows viewers to do this with impunity as they can follow this diversion and always return to their programme at the point they left it -- interactive functionality remains much more limited in NZ, given the smaller size of our market.
The four strategies above are a response to the decline in advertising volume as viewers have ever more control over how they will spend their time. The next two relate to the primary motivation for viewing: programmes.
5. Associate. Viewers understand the grammar of a break: title – sponsor credit – ads – trailer – sponsor credit – title – programme. Increasingly the sponsor credits provide the navigation by which viewers start and stop any ad break zipping. This helps protect the audience delivery of programme sponsorship. But the real potency of sponsorship lies in the ability to link the values of a consumer brand with the values of the programme brand and the ability to promote between the two.
6. Embed. The ultimate placement, of course, is inside the programming. This is not only about ad-funded programming and product placement, but also about how sports and entertainment rights are increasingly a mechanism for on-air branding and off-air promotion. Those able to add saliency of association with depth of involvement in a sport or event can enjoy a degree of consumer sentiment that advertising alone has always struggled to deliver.
The strategic importance of MySky HDi
It's tempting to treat the MySky HDi as just another set-top box -- but that would be a mistake. This latest little black box:
provides access to all of the latest goodies in the television broadcasters' bag of tricks, including 1080i High Definition video, 5.1 audio and of course full PVR functionality
will become the gateway to Sky's IPTV offerings, likely to include Catch-Up TV (the ability to access your favourite shows up to seven days after they've first screened on Sky) and Pay-Per-View TV on demand
will massively reduce Sky subscriber churn (once you've changed your viewing habits via the PVR you won't ever want to go back to linear television viewing)
is the cornerstone of Sky's multiroom strategy (i.e. selling multiple subscriptions into the household through very attractive pricing)
delivers Sky serious competitive advantage (NZ copyright legislation, which gives broadcasters control of their listings information, means that no competing PVRs can list Sky shows without their permission)
is an insurance policy against any future introduction of anti-siphoning legislation (the PVR technology will help Sky retain audiences even if key sporting events are lost through politicial machinations)
will drive enthusiastic word of mouth (PVR owners are amongst the most fervent evangelists for their chosen products)
demonstrates telly at its finest (the All Blacks look magnificent in high-def, the haka in 5.1 awesome audio will bring down the house)
puts viewers firmly in control (a must for Generation C).
So thanks, Sky, for bring us MySky HDi. Now we're hanging out for the 3D hologram edition ....
The new MySky HDi service arrives next month, although only just -- installation starts from July 29.
The MySky HDi is a Personal Video Recorder (PVR), just like the original MySky box which launched two and a half years ago (December 2005). If you’re already a MySky user (as some 30,000 Kiwis are), you probably won’t get too excited about the new box — even though the MySky HDi has more enhanced capabilities than the original, most won't be enabled at launch.
In practice, then, there aren't a lot of reasons for existing subscribers to upgrade right away -- except of course for the stunning High Definition output (and 5.1 Surround Sound) that the new box delivers if you have an HDMI-capable TV set. However (as noted below) Sky is pricing the new service very attractively, to encourage existing MySky subscribers to keep their existing box and add on the new box as a second unit.
The new box has twice the theoretical capacity of the original MySky (320 gigabytes vs 160 GB); in practice, however, consumers can only access 160GB to store recorded programmes (vs 100GB on MySky V1.0) — the remainder is for operating system software and to store future pay-per-view programming downloaded to the box.
The MySky HDi comes with four tuners, but only two are enabled in the first release — so initially you’ll be able to record two Sky channels at once, just as the existing box offers. You’ll have to wait for the additional tuners to be enabled via software upgrades at a later date.
If you’re an existing MySky subscriber, you’ll be able to switch to the new box for a one-off fee of just $49; if you don’t already have a MySky box, you’re up for a one-off fee of $599 or a monthly $15 rental (not including the cost of any Sky subscription).
At launch, High Definition offerings will be available for Sky Sport 1, Sky Sport 2, Sky Movies, Sky Movie Greats — and TV3, offering HD content where available through the MySky HDi platform (as well as through Freeview|HD).
You’ll pay an extra $10 a month to access the High Definition content — unless you keep your existing Sky box as well as the new MySky HDi. Then the extra fee is waived (but you’ll pay $25 a month for the additional "multiroom" subscription to Sky). That's an enticing price point, low enough to encourage existing MySky subscribers to double their viewing pleasure.
The “i” in MySky HDi refers to interactive offerings — in about 12 months (E&OE) the box will be enabled to receive internet-delivered television (IPTV) from Sky.
At launch date, the MySky HDi focus is on High Definition, with Sky promising that at launch around 60% of the movies screening on the movie channels will be in HD, expected to be around 90% by the end of 2008.
Sport is also a no-brainer for HD, and some 500 hours of HD sporting content will be screened on Sky Sport in August, with the amount continuing to grow as more content is provided in that format. Rugby, League, Soccer, Motor Racing, Cricket and many other sports will be offered in HD, from both international and many local fixtures.
In a hint of things to come, Sky is promising that the 2010 Winter Olympics will see Prime go HD with 12 hours a day of Olympic content (and four channels on Sky offering Olympic content 24 hours a day). By the London Summer Olympics of 2012, Prime will be carrying 22 hours a day of HD Olympic content, whilst at least 8 Sky channels will be covering the action 24 hours a day.
The MySky HDi represents evolution rather than revolution — more goodies, but basically the same service already available via MySky. The most important difference, however, is in marketing of the new service. Sky deliberately held off promoting MySky beyond its launch phase, waiting for the next generation box that it knew was just around the corner (although, as is the way with technology, delayed from its original launch date). Even so, the company installed around 30,000 MySky boxes.
This time, the gloves are off. The MySky HDi will get some serious promotion, which will inevitably drive significant penetration. And that in turn means it's time for the advertising industry to get to grips with the game-changing nature of personal video recorders. So herewith some fast facts about PVRs and what happens in PVR-enabled households:
According to a March 2006 US study from Nielsen Media Research:
10% of total viewing (and 17% of primetime viewing) in PVR homes Monday-Wednesday was playback of time-shifted content
Two-thirds of all playback was of content recorded earlier the same day
Another US organisation, Magna Global, conducted a research study based on custom data from Nielsen Media Research. Among the key findings: there are substantial differences among viewers who have had a PVR for less than one year vs. those who have owned one for a year or longer. Unsurprisingly, people tend to use the PVR features more frequently as they become more familiar with the technology.
Other insights from that study:
PVR owners watch more television. 29% of viewers with PVRs for longer than a year said they watch more broadcast television than before they had a PVR.
Approximately half of respondents said they pause live shows often or always.
More than half of PVR owners have either recorded or watched a recorded program within the last 24 hours.
About 80% say they watch a minimum of three-quarters of programs they record.
Half of all PVR users sampled automatically record five or more programs each week.
36% watch recorded programs in primetime, while 18% watch these programs in the 4-8PM daypart.
And one last US study (lest we overwhelm you with statistics), Forrester's September 2004 analysis of PVR consumer behaviour, "Inside The Mind Of The PVR User" (based on its survey of 588 PVR users) reveals that:
Consumers with PVRs spend almost 60% of their TV viewing time watching recorded or delayed programmes.
PVR owners rated their improved enjoyment of TV at an average 4.4 on a 5-point scale.
Consumers say they love the control that PVRs give them.
And (the main reason that Pay TV operators like Sky love PVRs) less than 2% of people who own PVRs have stopped using them.
Real-time viewing drops by 60% with PVRs, but programs like the evening news and sporting events are among the programs that retain significant real-time viewing.
The Secret Life Of PVR Households
People who live in PVR households are different. We've told you this before (September 2004), but for the benefit of our newer readers, a refresh. Those who are the proud possessors of PVRs indulge in:
Buffering
Moving favourite shows to a more favourable time slot. Common examples are evening soaps that people can shift by a short time to accommodate family functions like dinner or bathing the kids. (‘I normally bath the kids just when Shortland Street is on. Now I record it every day and watch forty minutes later’).
Series Linking
The ability to bookmark a particular programme or series of programmes is the essence of the PVR. (‘I never worry about missing Grey's Anatomy now, in fact I'm not sure I can even remember when it's on’). This is a feature closer to PVR functionality and depends on advanced EPG information.
Grazing
Scanning a complete day or evening’s viewing via the on-screen programme guide and recording a selection for later viewing. Friday evening schedules are popular with users, who use the rest of the weekend to catch up on the recorded shows. (“While my wife is getting dressed to go out, I grab the best of the night's viewing to watch on Saturday mornings”).
Stacking
Using the PVR to collect a number of episodes for a binge viewing session. (“I had the whole of this week's Days of Our Lives programmes, and watched all five episodes in one weekend”).
Archiving
Dropping content from the PVR onto a DVD on connected external equipment - this is most often used to give copies to other people.
Compressing
Primarily a sports related concept, people use the PVR to record an event (football and rugby games seemed the most commonly cited examples) and create a ‘highlights’ version - watching a 90 minute game in 20 minutes.
Extending
The flip side of ‘compressing’, more sophisticated users watch a live game through the PVR, re-winding and re-playing the key events repeatedly, and catching up with real time at the half way break. Some people talk about taking two hours to watch a 90 minute game.
Pausing
The pausing of live TV usually starts out being the least used of all the new functions (because it represents a departure from the well-understood recording paradigm). This zapping in and out of the recorded content requires a more committed understanding on the part of the consumer of the timing and scheduling of programmes. (‘we now sometimes use the ad breaks to catch up to live, but it is fiddly’).
Ad Sampling
PVR users became sufficiently adept at using the multi-speed fast forward functions to seldom watch the ads before or during programmes, with one caveat: viewers halt the fast forward process to watch ads they enjoyed. (‘we almost never watch an ad in our house any more unless it is one the kids like’).
Well, yes, what about the ads?
The US Forrester research study (referenced above) found that three out of four PVR users watch some ads at least occasionally, with movie ads and ads for upcoming programs faring best.
Consumers with PVRs say they watch less than one in 10 ads about credit cards, long-distance carriers, car dealers and banks. The average PVR user sees only 46% of the ads in the programs he watches.
Those numbers, from 2004, are still relevant today. April 2008 research from the leading US PVR operator TiVo reveals that five of the top ten ads most watched during PVR replay in April were movie trailers. The other five (and their positions in the Top Ten):
3. Ford Auto & Truck
5. Glaceau Flavored Vitamin Water
6. Apple Macintosh Computer
8. Apple Macintosh Computer
9. Crest Whitestrips/Whitening
Interestingly, there isn't necessarily a direct relationship between the popularity of the ads and the popularity of the programmes within which they appear. The highest rated April ad spot was for the film “Forgetting Sarah Marshall”, which aired during an episode of NBC’s The Office, a show which didn’t even make the Top 10 Programme list.
As we've noted before, consumers are not specifically setting out to avoid ads. The PVR simply makes recording TV shows so painless that the poor old PVR family usually has a backlog of recorded content, and is fastforwarding through adbreaks simply to get through as much content as possible within the limited time that today's societal pressures allow for leisure. Up to twenty precious minutes can be reclaimed from every hour simply by skipping through peripheral material - credits, station IDs, advertising et al. However many viewers continue to watch ad breaks ‘as live’ – at least until a ‘bad ad’ reminds them of the opportunity to skip through and catch up.
The PVR paradigm-shuffling has massive implications for broadcasters, not just advertisers. Traditionally, programmers have launched new programmes by placing them just before or just after existing top-raters on the schedule. Now that viewers are time-shifting those top shows, broadcasters need to find other ways to promote the new stuff. On today's US network television, you'll find "coming up next" promos embedded deep within each programme - a step in the right direction, but not much use if you're watching a show hours or days later. PVRs are miraculous, but time travel is not yet built into most models.
Another major issue for both broadcasters and advertisers: grazing reduces. PVR households can barely keep up with the backlog of programmes they want to watch, and have less time available for just cruising through the channels. Result: drooping ratings for not-quite-ready-for-primetime shows.
British research from Thinkbox (based on BSkyB's Skyview audience panel of 20,000 Sky Digital homes) provides some comfort for the beleaguered advertising industry:
'People don't get PVRs to avoid ads; they get them to find content they want to watch. Owners are not militant anti-commercial ad avoiders. When a home gets Sky+ [the UK equivalent of MySky], 14% more commercial TV is watched than before (20 minutes more a day), about 87% of viewing is still to live broadcast and, of the viewing that is timeshifted, 44% of ads are watched "as live". The net effect of all this is that Sky+ owners see about 6% more ads at normal speed than they did before they had it.
'Of course some people do fast-forward through ad breaks, but not all of the time. Perhaps "speed watching" is a more appropriate phrase than “fast-forwarding” as demonstrated by Thinkbox’s engagement study, which filmed people watching television in their homes. [Thinkbox] witnessed extraordinary levels of concentration on the screen amongst those with their thumbs on the accelerator. And Duckfoot Research & Development established that as long as you’ve already seen a TV ad once, your recall of this ad when seen at 30 times faster than normal is about 65% of the level that it would otherwise have been at normal speed. So, for advertisers, "speed-watching” has real value.
'Ads are also spotted and rewound to watch fully. Thinkbox found there was a greater appreciation of good ads and of the timeliness of some advertising, especially on live TV: for example retail sales, films and trailers. PVRs renew their owners' interest in the relevance of advertising.
'There will always be a minority who wish for an ad-free media world but the research showed PVR owners were more circumspect. Many acknowledged advertising's funding role and rejected the notion of paying more for ad-free TV.'
So what can advertisers do?
A 2005 MEC MediaLab UK study noted six possible strategies emerge in response to the arrival of PVRs. Not all of them are viable, and individual advertisers’ circumstances will dictate appropriate priorities.
1. Ignore. The major justification for a ‘head in the sand’ approach would be that the early adopter behaviour is just that – and won’t extend to the majority. However PVR technology is intuitive, requires no disproportionate motivation or skill, and whereas not everyone will adopt all functions, a broad majority will routinely avoid advertising.
2. Augment. If there’s a marginal decline in TV advertising availability then a sensible strategy would be to diversify a media portfolio to include other channels. PVRs present another reason to do this – although in practice this only continues a well established trend. TV-only media strategies are now in a minority.
3. Engage. If there’s less audience availability, we should make the most of the availability that remains. In particular there is an issue for ‘low engagement’ categories such as finance and a clarion call for these advertisers to look at developing higher-engagement ads that viewers will accept as entertainment rather than skip as intrusion. The natural focus for this is with the creative expression, yet there are a number of media implementation aspects: we can expect high value live programming – least likely to be ‘PVR-ed’ – to become more valuable.
4. Enhance. The same technological revolution behind PVRs also allows us to take the viewer out of the linear broadcast stream via TV interactivity ('press the red button for more information'). In the UK the advent of PVRs allows viewers to do this with impunity as they can follow this diversion and always return to their programme at the point they left it -- interactive functionality remains much more limited in NZ, given the smaller size of our market.
The four strategies above are a response to the decline in advertising volume as viewers have ever more control over how they will spend their time. The next two relate to the primary motivation for viewing: programmes.
5. Associate. Viewers understand the grammar of a break: title – sponsor credit – ads – trailer – sponsor credit – title – programme. Increasingly the sponsor credits provide the navigation by which viewers start and stop any ad break zipping. This helps protect the audience delivery of programme sponsorship. But the real potency of sponsorship lies in the ability to link the values of a consumer brand with the values of the programme brand and the ability to promote between the two.
6. Embed. The ultimate placement, of course, is inside the programming. This is not only about ad-funded programming and product placement, but also about how sports and entertainment rights are increasingly a mechanism for on-air branding and off-air promotion. Those able to add saliency of association with depth of involvement in a sport or event can enjoy a degree of consumer sentiment that advertising alone has always struggled to deliver.
The strategic importance of MySky HDi
It's tempting to treat the MySky HDi as just another set-top box -- but that would be a mistake. This latest little black box:
provides access to all of the latest goodies in the television broadcasters' bag of tricks, including 1080i High Definition video, 5.1 audio and of course full PVR functionality
will become the gateway to Sky's IPTV offerings, likely to include Catch-Up TV (the ability to access your favourite shows up to seven days after they've first screened on Sky) and Pay-Per-View TV on demand
will massively reduce Sky subscriber churn (once you've changed your viewing habits via the PVR you won't ever want to go back to linear television viewing)
is the cornerstone of Sky's multiroom strategy (i.e. selling multiple subscriptions into the household through very attractive pricing)
delivers Sky serious competitive advantage (NZ copyright legislation, which gives broadcasters control of their listings information, means that no competing PVRs can list Sky shows without their permission)
is an insurance policy against any future introduction of anti-siphoning legislation (the PVR technology will help Sky retain audiences even if key sporting events are lost through politicial machinations)
will drive enthusiastic word of mouth (PVR owners are amongst the most fervent evangelists for their chosen products)
demonstrates telly at its finest (the All Blacks look magnificent in high-def, the haka in 5.1 awesome audio will bring down the house)
puts viewers firmly in control (a must for Generation C).
So thanks, Sky, for bring us MySky HDi. Now we're hanging out for the 3D hologram edition ....