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DVD Space For Sale?

1 Dec, 2002 By: Kurt Indvik

There was a recent item in the trade news about ad-skipping on personal video recorders and how this trend is causing advertisers to dramatically rethink their whole approach to broadcast advertising. And with advertisers looking to spend that money elsewhere, I wonder when and how some of those dollars might end up on DVD?

According to a survey of major advertisers conducted by Forrester Research and the Association of National Advertisers, 75 percent of national advertisers said they will cut their TV ad spending because of ad skipping taking place on the nearly 2 million PVRs already in U.S. households. Also, 75 percent of those national advertisers said they would be cutting their ad budgets by as much as 21 percent to 40 percent.

While this reaction may be a bit over the top, considering the small percentage of homes with PVR, the message is clear: Consumers faced with traditional advertising in an interactive environment such as PVRs (and the Web) will choose to not interact with that advertising or avoid it altogether.

I can't help but think that somewhere, someone is trying to develop an advertising model that works for DVD, especially in light of the growing trend of consumer goods companies participating as marketing partners in home video.

So far, studios have not attempted to place advertising on discs for fear of ruining the commercial-free experience. The endless trailers of upcoming studio theatrical releases can be skipped, although several studios are guilty of making that maneuver maddeningly difficult, even to the extent of causing one's DVD player to freeze.

There were a few early attempts at placing ads on VHS movies — Top Gun and Pepsi is a good example — but the concept never got much traction in the industry after a fair amount of consumer backlash at having to view commercials on what they thought was supposed to be a theater-like experience. However, interestingly enough, advertising on home video is fairly common in Europe.

For advertising to work in an interactive environment like DVD, it has to be part of the environment and more closely linked with the content. And by this I don't mean more creative product placement in films, which is now becoming more and more obvious.

If studios and marketers are looking for ways to capitalize on the entertainment platform of DVD with paid-for marketing partners (short of selling logo plugs on DVD menu pages, etc.), they will need to explore the opportunities to create sponsorships of special features or other value-added content that the sponsor can benefit from being attached to. This approach will be a challenge in that the content has to be truly meaningful to the film, yet offer some promotional opportunity at the same time.

As DVD grows, we can expect to see some attempts in this vein.

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