Tuesday, June 3, 2003

TiVo to sell info on viewer choice

By May Wong
The Associated Press

SAN JOSE, Calif. - TiVo Inc., the company whose digital video recorders were recently praised as "God's machine" by Federal Communications Commission chairman Michael Powell, is hoping to profit from its omniscience.

The leading maker of digital video recorders Monday began offering advertisers and broadcasters second-by-second information on the television commercials and shows its users are watching - or skipping.

Digital video recorders let TV viewers record programming onto a hard drive, pause live broadcasts, do instant replays and quickly skip commercials. TiVo's machines also can analyze their users' recording habits in order to detect preferences and suggest similar programs the viewers might like.

Those features have helped TiVo amass a cult-like following and prompted Powell to rave at this year's International Consumer Electronics Show that TiVo was his favorite Christmas gift.

Because the devices periodically connect to TiVo's computer servers to gather programming information, the San Jose-based company can collect detailed viewing data on its 700,000 subscribers.

As in TiVo's previous audience-measurement projects - it found that the Pepsi ad featuring Britney Spears during the 2002 Super Bowl was the most watched commercial - TiVo executives said they will be gathering information only in aggregate, such as by ZIP code. The habits of individual users will remain anonymous.

"Our audience measurement capabilities will offer broadcasters and advertisers an unprecedented, detailed look at how viewers consume programming and advertising," said Martin Yudkovitz, TiVo's president.

TiVo pioneered digital video recorders in 1999.

Consumer adoption has been rising steadily, albeit slowly. TiVo expects to have 1 million subscribers by the end of the year. But some analysts predict that 20 percent of American households will have digital video recorders by 2005.

The entertainment industry has been leery of the technology and its powerful feature of skipping commercials. TiVo hopes its customer-data service will help alleviate those fears.

Unlike traditional rating surveys that tell advertisers which shows people are watching, TiVo can gather specific data showing how its users are watching TV - at what points they choose to fast-forward or click for an instant replay.

For instance, during the recent Grammy Awards, TiVo found a spike in instant replays when actress Julia Roberts appeared on stage to present an award.

In a previous pilot project, the National Football League paid TiVo for audience-measurement data during last year's playoffs and Super Bowl. The analysis showed that a Budweiser commercial received the most pause-and-replays during a wild-card playoff game and that Spears beat the men on the field in the Super Bowl instant replay department.

It's that kind of customer data that TiVo wants to give broadcasters, content distributors and advertisers, so they could better tailor their content.

"Advertisers and programmers undoubtedly will want to understand how the technology will impact viewer behavior, and this is the first opportunity for them to get data to understand how viewers are using the technology," said Greg Ireland, analyst with market research firm International Data Corp.

At the same time, TiVo has repeatedly worked on alleviating user concerns of invasion of privacy, stressing that it keeps any collected data anonymous.

Chris Szumigala, 44, of Erie, Pa., says he's not worried about how TiVo is measuring his viewing habits - especially if it eventually helps the company stay in business and lets programmers know what shows he likes, such as the Sci-Fi channel's Farscape, which airs at 1 a.m.

Thanks to TiVo, the hospital administrator got to catch up on five episodes during a rainy day last Saturday.

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