TiVo Inc. announced it has signed an advertising services agreement with DirecTV.
Under the new agreement, each company may sell and distribute TiVo's advertising capabilities on DIRECTV digital video recorders (DVRs) with TiVo service. Both companies say they will each retain their respective revenues. About two-thirds of TiVo's more than 3 million subscribers received their TiVo boxes through a deal with DirecTV, reports the Associated Press.
In September 2004 a Forrester Media study found that consumers who own DVRs like TiVo skip 92 percent of ads. Viewers report watching 8 percent of commercials in recorded programming, however, 30 percent of viewers report that they do not watch commercials at all.
The skipping of commercials via DVRs has become a challenge for TV advertisers. In November 2004, TiVo announced its plan to launch pop-up billboards and advertisers' logos over TV commercials as viewers fast-forward through them.
"What this deal portends is that those working in the interactive space are going to get closer to television, and those working in television are going to get, whether they like it or not, closer to interactive," says Jim Meskauskas, iMedia media strategies editor.
Dr. Jeffrey Cole, Director of the Center for the Digital Future at USC Annenberg School, told iMedia Summit attendees in November 2004 that, "I use the phrase 'TiVo' even though I think TiVo will win the battle and lose the war and in 25 years we're going to call all of our PVRs 'TiVo' even though TiVo may be out of business."
Other terms of the TiVo and DIRECTV deal were not disclosed.