Can Madison Avenue make zap-proof ads?
NEW YORK: With millions of viewers poised to sign up for DVR services, network executives have plenty to worry about these days. Already scrambling as younger viewers drift off to play video games and watch DVDs, they face a potentially even more powerful threat: Over the next several years, DVRs, which record TV shows on hard drives instead of on videotapes, are set to hit the mainstream as cable and satellite operators start to offer them at huge discounts.
As a result, the number of DVRs in front of couch potatoes could nearly double, to 5.8 million by the end of 2004, according to tech consulting company the Yankee Group. That number could jump to 24.7 million -- or more than one in every five TV households -- by 2007. By then, SG Cowen Securities Corp. analyst James Marsh projects, TV users will be zapping through more than 60% of the commercials, ignoring an estimated $6.6 billion worth of ads. "The DVR has the potential to blow apart the entire network business model," says media consultant Blair Westlake, a former chairman of Universal TV.
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