What TiVo Teaches Us About the Internet

By: Steve Outing

Ever since Salon.com introduced its Salon Premium paid subscription
option ($30 per year for an advertising-free Webzine experience),
I’ve been pondering the intelligence of such a move – and the
relevance of such a strategy for news Web sites.

Yes, many Web users are annoyed by advertising accompanying their
free content – especially now that more sites are accepting
“big, honking ads” that are difficult to ignore. Some people will
pay to avoid the annoying pop-up ads that appear as small windows
on top of the content they want to see.

On the other hand, is it wise to take part of your audience away
from advertisers – especially when those people (who are
willing to pay) may be among the best potential customers for
your advertisers because of their willingness to spend money?

The price for free content

There is some merit to offering Web users an ad-less online
environment. A year ago, when Web advertising was still
exemplified by the 468-by-60 pixel banner ad, I would not have
said that. For most Web users, the experience of reading an
online content site was certainly tolerable. The reasonable
person understands that there’s a cost to producing good content,
and ads are the “payment” made by the Web content viewer.

Now we’ve got a different situation. Web ads are becoming much
more intrusive. Trying desperately to stem the flow of red ink,
online publishers are using big ads that take up much of the
computer screen and feature animation. “Interstitials” are
gaining favor. (These are akin to TV commercials that you see
before you view a piece of content. A news site user clicking on
an article link might see a 10-second animated ad or interstitial
before the story is viewed, for example.) And pop-up window ads
– long a staple of pornography Web sites – are turning
up on mainstream news sites.

In short, the Web experience is becoming more annoying to users
because of the dour state of the Internet content economy.

The result of this trend toward more intrusive online advertising
is likely to take a couple of different tracks. First, we can
expect to see a resurgence of Web ad-blocking software, which
will allow online users to view Web sites sans ads. Ad-
blocking software programs that added functionality to Web
browser software first appeared several years ago, but they never
really took off – because the Web experience wasn’t so
tainted by ads that most people couldn’t tolerate it. With big,
intrusive, flashing ads, the ante has been upped and ad-blocking
software will re-emerge.

The second path is equally as disturbing to online publishers
– that Web users will learn to ignore the big ads just as
they already ignore the banner ads.

What TiVo teaches us

This brings me to TiVO, the (for now) leader in the “personal network
recorder” space. PNRs are basically next-generation VCRs, which automatically
record TV programs and store them on huge hard disks for on-demand viewing.
(TiVo’s principal competitors are ReplayTV and Microsoft’s UltimateTV.)
It’s television that’s under the control of the viewer.

I love my TiVo unit. For me, it’s one of those devices that once
I started using it, I couldn’t imagine the horror of going back
to traditional TV watching. I can break down why I love this
method of TV watching into two primary categories:

o I watch my favorite programs whenever I want, not when
the TV networks have them scheduled. And my favorite shows are
recorded automatically (after teaching the unit what you like),
without the major hassle of programming a VCR.
o I no longer have to watch television commercials. I fast-forward
through them. Wow, do I ever love that capability!

We’re still in the early adoption cycle for digital recorders
like TiVo; few homes have them. But I have no doubt they will
proliferate quickly. (I tell everyone I know that the device will
empower their TV watching. I predict that word of mouth will grow
the PNR sector, adding to the power of TiVo’s and its
competitors’ marketing.)

What the television industry faces today is similar to what the
Web faces tomorrow. With apologies to those charged with
producing TV advertising, watching a network TV show with all the
commercial breaks is truly annoying. If this weren’t so, TiVo and
its ilk wouldn’t be so appealing as a solution to avoid the
unpleasantness of standard TV watching.

TiVo, then, is the equivalent of the Web browser’s ad-blocking
software. The more obnoxious the ad presentation (a la
pop-ups and Flash-animated mega-banners), the more popular will
become technologies that eliminate them.

The conclusion I arrive at is that big ads on online content and
news sites will not be a big success. While the online news and
content industries are headed down this new path of more
intrusive online ads, it well may prove to be the wrong way. Just
as television advertising will need to adapt to the realities of
TiVo users like me skipping over commercials, Web publishers must
deal with the same issue.

The convenience factor

Now, let’s get back to the paid-subscription model of Salon
Premium. The strategy makes sense because current trends are
driving us toward consumers having options for getting rid of ads
anyway. Salon Premium offers the site’s users an alternative to
using ad-blocking solutions.

Think of it this way: We TiVo users have paid a fair sum of money
(a few hundred dollars for the device, plus either $10 a month or
$200 for a lifetime subscription) not for TV content. We
paid for the convenience – the ability to watch when
we want and to skip commercials. It’s the same with Salon
Premium. Subscribers pay for the convenience of avoiding large,
intrusive ads. (The Premium option does include some extra Web-
only content, but that’s not the main selling point.)

The idea is catching on. Another example is European Internet Network,
which gives its international news content away
free, but attaches lots of ad clutter. EIN users are encouraged
to buy a “Professional Edition” subscription for $4.99 per month.
That gets a “less cluttered reading environment” with faster-
loading pages that don’t include banners or pop-up windows, plus
other extra benefits like daily e-mail news briefs and archive
search, and a promise of no e-mail marketing pitches.

What about news sites?

Can the Salon and EIN examples fly in the online news space? For
those news sites contemplating the new mega-ads or adding pop-
ups, or other more intrusive approaches such as sending e-mail
marketing pitches on behalf of advertisers, the answer is not
only “yes,” but “you have no choice.” The more annoying and
attention-getting you make your Web site’s advertising, the more
you risk driving your users to using third-party solutions to
eliminate your intrusive advertising.

It’s an “if you can’t beat ’em, join ’em” scenario. As you “turn
up the volume” on your site’s advertising, offer your users a
TiVo-like convenience alternative.

Finally, here’s an important bit of advice should you try a Salon
Premium-like service. Take into account that your paying premium
subscribers will pass along URLs of your content to their
friends. Since those friends are unlikely to be premium members,
your system must direct non-subscribers to alternative pages
containing the same content but which also include your site’s
advertising.

Other recent columns

In case you missed recent Stop The Presses!, here are
links to the last few columns:
o Lessons From the Online Sex Sites, Wednesday, April 11
o Mining Your Site For Multiple Revenue Streams, Wednesday, April 4
o In Island Monopoly Media Market, Net Provides an Alternative, Wednesday, March 28
o Archive of columns


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Steve


Got a tip? Let me know about it If you have a newsworthy item
about the online news/interactive news media business, please send me a
note.



This column is written by Steve
Outing for Editor & Publisher Online. Tips, letters and feedback
can be sent to Steve at steve@planetarynews.com


Copyright 2001, Editor & Publisher.

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