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A NEW BLACK HOLE FOR TV ADS

May 11, 2012

In 2003 when DVRs (Digital Recording Devices) became widely available, TV advertisers had major worries. Would people record their favorite show and just skip the commercials on playback? Well, yes. According Nielsen, 43% of households now have DVRs and 50% of ads get skipped. Soon it could be 100% if you have an extra $4. Welcome to the “Hopper” from Dish.

Available since March, according to a Wall St. Journal story by Shalini Ramacjamdram (May 11),”The new DVR replaces commercials with a black screen momentarily where the ads were broadcast, or a glimpse of the first frame of the first commercial. Then the show resumes. Consumers merely have to click an on-screen Auto Hop button before a show to enable the feature.”

Although the Hopper costs more per month than a standard Dish DVR, $10 vs. $6, that extra investment could create a giant black hole in broadcast television advertising. In the Wall St. Journal story Dish Chief Executive Joe Clayton refused to share how many customers have opted to get the Hopper, but he said it’s a “big number.” Of course, Dish makes it clear that it isn’t deleting ads. If customers want to watch all the ads, they can. That might be comforting to someone, but not marketers. Don’t be surprised if you see an even greater rush to move TV programming online, where it’s a lot more difficult to eliminate ads.

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