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Comcast and Tivo: The Model Is In Ads as Service

By - January 29, 2009

Yesterday at the NAPTE show TiVo CEO issued a call to action to the television business: get a new business model, or suffer the same fate as the newspaper.

I think he’s right, and I’ve got some ideas about what that model should be. I’ll be posting more on this, but the short overview is this: Television should respond to the exhaustive knowledge it has of our viewing habits, and create a model that trades value for engagement. I sketched this out a while back in my post “TV and Search Merge” but that was more than four years ago. A lot has changed, and I’ve learned a lot more about how marketing works. So look for another Friday sketch, tommorrow, outlining my more considered thoughts on the subject.

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10 thoughts on “Comcast and Tivo: The Model Is In Ads as Service

  1. JG says:

    John,

    I am getting very tired and weary of ads as a business model. Whether or not those ads are “relevance/behavior” targeted.

    Why can’t I just get what I pay for, with some service that I want? Nothing more, nothing less. Just a fair exchange of marketplace value, via a transparent, open trade?

    It’s like with Tivo.. I paid real money for the hardware. And then I paid real money for the subscription, on top of that. So I am doing that fair trade exchange.

    Then, all of a sudden, Tivo starts showing me ads. First they show an ad at the bottom of the main screen. Then, I’ve noticed, that they show ads when I pause a program, mid-stream.

    WTF is up with that? I paid real money for a service, so that I didn’t have to see ads. And now they’ve changed the terms of that service, so that they can make even more money for themselves, by showing me more ads.

    As a customer, it is very off-putting, and not the direction that I want to see things go.

  2. It seems like the way things are going now all industries have to reinvent themselves a little to keep up with our ever changing marketing field.

  3. JG says:

    Yes, Nick, industries do have to reinvent themselves. But why does that re-invention necessarily entail an increase in the number of ads that we are subjected to, all day, every day? Why is it *all* going in that direction?

    I think I’ve mentioned this before on this blog, but I remember as a high school kid, my friends and I used to joke that they should put up reading material above the urinals in the men’s room, so that guys would have something to do while they awkwardly kept their eyes focused straight ahead. Sure enough, I’ve noticed over the past few years that many bars and restaurants have indeed started placing reading materials on the walls in front of the urinals: advertisements.

    I don’t care how relevant those advertisements may be to what I am doing that very moment, standing there at the urinal. I do not want to see them.

    Yet that’s the way everything is going. Our society has no barriers anymore — we’re even willing to fill people’s heads up with ads, when they’ve got their pants down.

    It really pisses me off. Pun intended.

  4. Lotta Nuthin says:

    What exhaustive knowledge do they have? None.

    Their medium goes one direction.

    The most anyone has is Nielsen, and for that even the Networks must pay.

  5. Astroloji says:

    Mr. Rogers said TiVo is taking steps to help rectify some of the problems its technology has posed for advertisers by offering them different positioning for ads, including pop-ups at the delete screen of a recorded program or in the user interface itself. Another alternative advertisers have considered is product placement within shows, an option Mr. Rogers said isn’t as effective with consumers as standard advertising.

  6. converter says:

    JG –

    You make a good point with Tivo. I believe you should be able to escape those ads when you pay a premium price for a premium service.

    However, there are so many other things out there in the world that don’t charge a premium price (broadcast TV, yahoo search, google search, youtube, etc, etc), therefore we’re gonna get stuck with ads, because they’ve gotta pay the bills.

    As an average consumer, I’m fine with the tradeoff of less expensive service in exchange for letting my eyeballs see some ads.

  7. JG says:

    converter: My frustration is two part.

    (1) The first part is as you say: Premium services also starting to add more ads — without a subsequent reduction in the cost of the service. Were my buffalo wings cheaper, because I was subjected to ads above the urinal? No.

    (2) But the second part is the real kicker. As I asked above, “Why can’t I just get what I pay for, with some service that I want? Nothing more, nothing less. Just a fair exchange of marketplace value, via a transparent, open trade?

    What I mean is that more and more services are coming online, in which there is not even the option of paying a true price, in exchange for the core service. There is no ad-less option available. This is like the 15th time I’ve said this on this blog over the past half decade, but back in 1999/2000 when Google showed their first ad, I wrote them and asked them if I could pay the Google subscription fee, for an ad-less service. The answer was, and continues to be, no.

    Oh, sure, I know that I can install Greasemonkey and some ad-blocking scripts. But that feels to me like an unfair subversion of the system. I am not trying to “get away” with anything. I just want to be able to exchange fair value for fair value. I pay someone real money, and they provide me with a real service.

    So what gets me is that this is becoming less and less possible. More and more services are ad-only, and do not even give you the option of a regular, pay version. Google does not offer this option. Even if I wanted to pay them, I couldn’t. They won’t do it. Yes, you are absolutely correct; they’ve gotta pay the bills. But they won’t let me actually pay the bills. They only let advertisers do so.

    You may be fine, in “average consumer” mode, with exchanging your eyeballs for the service. But I am looking for a true, quality, professional experience. I want real information-seeking capability, with true customizable power in the implements and apparatuses that I use to find the information and knowledge that I am seeking. I want the information that appears in the right hand column of the search results not only to be ad-free, but to contain *more* organic relevant information, such as related queries, intersecting (related) information streams, and/or contextual or situational awareness interfaces. I don’t just want 10 links. I want to understand where those 10 links fit in to the larger picture.

    It is my ongoing supposition that having a service that is *only* ad-supported, and nothing else, does more than just suck user attention. No. I maintain that companies that only offer ad-supported services are so fundamentally affected and constrained by their own business model that they they never develop a real, deep, professional-grade service. The kind of service that would actually earn real money, the kind of service that people would be willing to pay for.

    It has always been laughable to me when folks have said “oh, the ads at Google don’t affect the organic results”. They do. Here is an analogy: I saw a study recently that claimed that drinking nothing but diet soda was bad for your health. But not for the reasons you think. It wasn’t bad for you because something in the soda was making you unhealthy. Rather, it was bad for you, because by only drinking soda you were missing out on the nutrients that you *could* have been getting, had you been drinking apple juice or milk instead. Soda is unhealthy in an “opportunity cost” manner.

    I fear that ad-supported services are similar. For every “advertisement=diet soda” that Google drinks, there is a more nutritious “contextualizing information service=apple juice” that they’re not drinking.

    So I again ask: Why are more and more companies not letting me exchange real money for goods and services? I would even be fine if there were some services that had a duality of options. But more and more only have a single option: advertising.

    Sometimes I feel like I am the only person even slightly bothered by this.

  8. JG says:

    Sorry, I flubbed my analogy slightly at the end there. Let me restate:

    For every “advertisement=diet soda” that Google gives me to drink, there is a more nutritious “contextualizing information service=apple juice” that I am not able to drink, because it doesn’t exist.

    So I never want to hear again that ads don’t affect organic information. They very much do, in an opportunity cost way. I get less overall nutrition from my search experience, because the only drink on the menu is diet soda, and not apple juice.

  9. converter says:

    JG –

    Just saw this article on the yahoo homepage……it’ll really make your skin crawl.

    http://tech.yahoo.com/news/ap/20090131/ap_on_hi_te/tec_nosy_ads

  10. JG says:

    converter: Oh, yeah, I heard about this stuff in the academic literature a few years ago. I’m very much aware of it. Should we be surprised, though? After all, it’s a logical extension of the Google approach, which is to monitor and measure everything you do (every click you make).

    If we as a society and culture already generally believe that Google makes the world a better place, because they monitor you, then it’s not that far of a conceptual leap to accept this sort of advertising. We need to understand that.

    In another related piece of news, check out this article about French reaction to the dominance of advertising:

    http://www.latimes.com/news/nationworld/world/la-fg-france-no-ads1-2009feb01,0,5124576.story