Fox News Channel parent News Corp is leading the charge to wrestle the ad-skipping phenomenon that are Digital Video Recorders, aka DVR's or TiVo, into some kind of compliance, if not submission. News Corp prez/COO Peter Chernin presented a game plan this week, as David Goetzl reports in Media Daily News:
WHILE ADVERTISER RESISTANCE TO PAYING for DVR viewers is the principal reason that upfront deals are being made on a "live only" basis, another factor may be an acknowledgment by major media companies that the DVR revolution is unstoppable and business models need to evolve accordingly.
In other words, why fight to hold onto a reality that's changing--it's time to get ahead of the curve?
"It's coming, whether we like it or not," said Peter Chernin, President-COO of News Corp., at an investor conference this week. And, he said, his company's entertainment business "is going to have to learn how to with" DVR predominance.
Chernin laid out a four-point plan for how News Corp.'s multitude of properties affected by DVRs and ad-skipping--from the Fox network to local stations to the FX cable outlet--can adapt and prosper. The strategy includes an emphasis on news and sports programming, considered largely DVR-proof; attracting more product placement and sponsorship dollars; experimenting with new ad models; and enticing advertisers to purchase integrated packages that include both television and Internet properties such as MySpace.....
...At News Corp., Chernin said the company is focusing heavily on bulking up its news and sports properties--from adding more local news at its stations to investing in the Fox News Channel to continuing to offer the NFL--since people prefer watching those genres live. As a result, the company plans to charge advertisers more for news and sports, he said, and sports CPMs should grow at a rate that is double that of entertainment programs.
"To the degree that there is some potential degradation in CPMs for entertainment (due to ad-skipping), you're likely to see a corollary increase in CPMs in live news and live sports programming," he said.
Other moves to combat DVRs at News Corp., Chernin said, include spreading the product placement/sponsorship model on "American Idol" to other programs; trying new ad models such as shorter spots and fewer pods; and using advertisers' interest in Internet properties to entice them to buy television as well in bundled packages.
"People like to use DVRs to skip commercials, and we better get smart about how to deal with it," he said.
