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THE MORNING BUZZ: Measuring the PVR Tradeoff

2 Jul, 2002 By: Holly J. Wagner

I've been thinking a lot lately about personal video recorders (PVRs). They're an illustrative paradox.

They are truly wonderful inventions. Users can designate programs they want recorded; skip ads, use video features like fast forward, rewind and pause; time-shifting is a given. It all records to a hard drive. A user with the right feed need never watch an unwanted snippet of programming again.

Then there's the dark side of PVRs. Masquerading in the guise of customer service, they offer the supposed boon of targeted programming. That is the double-edged sword of targeted entertainment, which the customer requests, and targeted marketing, which the programmer forces.

In the case of PVRs, the targeting happens via data collection. Every time a user selects programming, it's logged and providers aggregate that information to draw customer profiles and choose which ads to send to which audiences. Sometimes without controversial skip features.

Most companies only use aggregate data without personal identifiers, but many consumers have learned their lessons from the rapid shift in privacy policies on the Web, especially at portals like Yahoo! and MSN. Unfortunately what we agree to today could morph out of our control tomorrow or the next day.

And therein lies the rub. The same features that allow nearly sedative automatic programming also enable data collection. That means giving up a lot of privacy. As I've told many folks, I'm not worried about watching the box --- I'm worried about the box watching me.

I think companies like SonicBlue and TiVo don't get why they can't get their PVR products more widely adopted. They are the perfect balance of give and take. They give consumers everything they want.

But they freak programmers out because they defy the advertising model; and they freak educated consumers out because using them holds the potential of becoming your own 21st Century information leak nightmare.

The problem PVRs have with adoption is that the price of personalized programming, besides money, is both the very Internet-spawned ad formats and user privacy issues that most offend the technologically literate community that PVRs target.

This is a notion that could turn the national economy on its ear. Advertising generates billions of dollars, millions of jobs and constitutes a subeconomy unto itself.

Recent studies that have crossed my desk indicate that 1) most of the people who click through on Internet banner ads are children, na?ve in the ways of the cyberworld; and 2) most people hate intrusive Internet advertising formats, zapping popunders, survey windows and long intro displays almost immediately. The target audience wants to cut to the chase. The answer for advertisers is product placement.

The answer for programmers is subscription fees with a la carte structures that let consumers pick the level of premium programming and advertising they receive. I'll bet a lot of people will pay more for no ads, which will throw off a couple of subindustries. We're seeing it already. I think the Internet is confirming what we already know about advertising – most people see it as an excuse to go to the refrigerator or bathroom. (Nevermind that Turner Broadcasting CEO Jamie Kellner recently told Inside magazine we're all a pack of thieves when we watch broadcast programming and skip ads).

As the years ahead unfold, I suspect I will find myself in the Johnny Mnemonic, Matrix, Blade Runner sort of counterculture. I rebel against corporate America prying into my life and as much as I crave the convenience and compactness, I will not go quietly into technology's dark night.

But you have to decide for yourself.

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