BOB GARFIELD: What if, what if, what if? What if there were a magical machine to rid the world of this? [CARROT TOP AD PLAYS]
CARROT TOP: [SPEAKING LOUDLY] Hey, this is Carrot Top reminding you if you're going to make a collect call, pick up the phone and dial 1 800 [TAPPING FOR EMPHASIS] C A L L A T T --[SPEAKING THROUGH MEGAPHONE] 1 800 C A L L -A T T.
WOMAN: Nice job, Carrot Stick.
BOB GARFIELD: That of course is the walking, talking earache known as Carrot Top in an ad campaign that makes 25 cackling years of Madge the Palmolive Manicurist seem, relatively speaking, like sipping white wine in the hot tub. But there's the thing: this is a miracle anti-Carrot Top machine. It's called TiVo - a personal video recorder or PVR that among many other wonderful features enables users to obliterate anything deemed objectionable, obnoxious or simply obstructive of the program viewing experience. In other words -- the advertising. Indeed, studies show that those who own TiVo or similar devices skip past 55 to 80 percent of all TV commercials.
DAVID VERKLIN: We are going to witness tectonic change in television over the next 5 to maybe 8 years on the outside.
BOB GARFIELD: David Verklin is CEO of Carat North America, a media buying company that commands billions of dollars in TV ad spending.
DAVID VERKLIN: The PVR technology will become ubiquitous. So -- what happen when everybody has a hard drive on top of their television which a) lets them watch what they want to watch when they want to watch it and allows them to fast-forward TV commercials? I think it's going to change the way we all watch television, and I think it's going to make the 30 second TV commercial as we currently know it, be an endangered species.
BOB GARFIELD:Don't be too quick to applaud. Commercials are often an irritant but they've also almost entirely underwritten television programming for more than 5 decades. They pay for American Idol; they pay for the Super Bowl. They paid for Seinfeld and Uncle Milty. They paid for the coverage of the Iraq war, of the Army-McCarthy hearings, of the Kennedy assassinations. Television is among the most transforming forces in human history, all brought to you by your sponsor! But the paradigm is fixing to shift -- whether the advertising media complex is ready or not.
CHUCK ROSS: These technologies are on the horizon but no one is paying too much attention to it at the moment.
BOB GARFIELD: Chuck Ross is publisher and editorial director of Television Week magazine.
CHUCK ROSS: There are some people obviously that always lead the clarion call. There's Jamie Kellner who's head of the WB who says that if something isn't done about TiVo that it's almost a problem of national interest. But Jamie's definitely in the minority. Most television executives -- most executives on Madison Avenue -- are reactive; they're not pro-active, and things are going swimmingly right now, and that's all they're looking at.
BOB GARFIELD:Things would appear to be going swimmingly for the networks. The recent upfront buying season in which the year's advertising contracts are negotiated was the most lucrative in history, despite PVR fast-forwarding, despite the steady drop in audience sizes, and despite growth in satellite TV, DVD players, the internet and digital cable's video on demand. This bizarre boom before the storm combined with the FCC's relaxation of ownership limits has some media companies salivating for TV station acquisitions. But what happens when reality -- or at least technology -- sets in? Rob Kineally, a former executive with TiVo's competitor ReplayTv, is a packaging agent with the Creative Artists Agency in Beverly Hills.
ROB KINEALLY: I don't believe that advertisers are ultimately going to continue to pay more and get less, and devices like PVRs make it tricky for the existing advertising model to exist.
BOB GARFIELD:At the moment, PVRs are in only about one and a half percent of TV households. TiVo as a business is struggling, because the consumer stampede that was predicted at its introduction never materialized. Consumer resistance may have to do with price or fear of new gadgetry. It has nothing to do, however, with the underlying technology which needn't be in a standalone unit like TiVo to revolutionize viewing habits. Rob Kineally.
ROB KINEALLY: It's going to be in the next television sets being manufactured by Sony and others; it's going to be in the Play Station. It's already being offered in, as you know, set top box and cable services, and as it has several entry points to the home, the distribution'll grow rapidly.
BOB GARFIELD:Whereupon all hell could break loose --although with what outcome, nobody is certain. If the economic model for TV networks is poised to change, or even collapse, one wonders what function free, over-the-air TV stations will even have in a decade or two. Some cockeyed pessimists are proposing scrapping free TV for digital pay video on demand distributed not by networks but by cable and satellite operators or internet service providers with the TV broadcast spectrum auctioned off to the wireless telecom industry for hundreds of billions of dollars. Others believe the current model can be tinkered with to adapt to technology. Media buyer Verklin, for instance, imagines PVRs being marshaled, with their interactive capabilities, to target narrow receptive audiences with welcome messages based on demographics and viewing habits. Think: denture adhesive.
DAVID VERKLIN: All of a sudden if you're the brand manager on Poly Grip -- you have something you've always dreamed of -- just the toothless!
BOB GARFIELD: Others believe the solution is to seamlessly integrate programming content with commercial messages -- just like they did in the Golden Age of Television. [CLIP PLAYS FROM I LOVE LUCY SHOW]
DESI: Just call for Philip Morris, king size or regular. Buy 'em by the carton. You're gonna love 'em. And we're gonna love you. [LUCY ARNAZ GIVES HIM A KISS] Hey! What was that for?
LUCY: You said it so beautifully!
DESI: [LAUGHS] Good night, everybody.
LUCY: See you next week!
BOB GARFIELD: Of course that was also the era of "whites only" drinking fountains, of the Cold War, of the cha cha. Things change. And there's no reason to assume the viewing public is nostalgic for the heavyhanded product-pitching ways of the bad old days. This may explain why ABC's innovative product-laced Push, Nevada and WB's innovative product-laced No Boundaries were instant flops. It may well be that the PVR revolution will not leave blood on the streets in the next year or even five. James Rutherford, executive vice president of the media merchant bank Veronis Suhler Stevenson believes that the existing model will hold up for at least a decade to come and is advising none of his clients to rush out and dump their broadcast holdings. On the other hand, he loves his TiVo.
JAMES RUTHERFORD: I missed the Super Bowl cause I was traveling. I was able to watch the whole Super Bowl in about 45 minutes.
BOB GARFIELD: Let me see if I got this right. You fast-forwarded through the Super Bowl.
JAMES RUTHERFORD: Mm-hm!
BOB GARFIELD: The number one television commercial venue in the world--
JAMES RUTHERFORD: Mm-hm!
BOB GARFIELD: -- you missed all the commercials.
JAMES RUTHERFORD: Tsk! This year, I'm afraid I did. [MUSIC]