Rovi, TiVo And The Future Of Addressability
Bryan Noguchi, Senior Vice President, Media Director
The recent acquisition of TiVo by the company Rovi triggered an odd memory for me.
There was an off-leash beach near our apartment where my dog used to run amok – I’d take him there, cut him loose and hope I could get him back on leash when it was time to go home. The thing that saved him (and me) most of the time was that there was always some other dog there that was clearly under less voice control than my goofy beagle.
In the world envisioned by the Federal Communications Commission, where I own my set-top box instead of renting from my cable company, the new TiVo is going to resemble an obedience trial champion – also known as that dog that makes all the other dogs look brain-damaged.
It’s a glimpse into the future of converged content, addressable advertising and viewer control.
Easier For All
On my viewing experience checklist, I would want seamless navigation between over-the-top (OTT) and linear content, high-functioning DVR functionality and customizable content menus. The fact that a single deal allows me to tick off most of these boxes suggests to me that changes could come quickly, and this bodes well for all parties involved.
As a viewer, I get intuitive access to the content I love without toggling between platforms. As an advertiser, there’s an implication that I can follow my audience through their various consumption habits and patterns at a household level (which, of course, many addressable advertising platforms give us to varying degrees already), but it also carries the potential of getting even more narrow by identifying individuals within that home.
Distinguishing You From Your Household
If you think about how you set up your Netflix account and your favorites lists for your linear cable and satellite viewing, you know that eventually you’ll parse out preferences for your roommates, spouse or kids so that your personal recommendations don’t get clouded with a bunch of programming that you don’t care about.
Because your new TiVo box would be able to integrate your OTT and cable/satellite viewing menu, it doesn’t seem like a stretch that it would also be smart enough to know that the “Bryan” Netflix recommendations can be directly tied to the “Bryan” favorites channel list and even the “Bryan” DVR recordings. Not only could it start to recommend content from across the full spectrum of sources, but it also allows for more precise ad targeting.
Because the box is also your DVR, there should be ample space to cache messages on the hardware and organize them according to user media preferences, which implies that the messages could be served in much the same way a digital ad is served, regardless of the source of the content being viewed.
Ideally, time and programming context would be passed back to TiVo for analytics purposes. Coupled with the third-party data overlays from Experian, Axiom and other firms, which are already routinely incorporated by robust addressable players like Direct TV, you have a potent offering to increase message contextualization, exact audience delivery efficiency and ROI evaluation.
One Last Hurdle
The issue with addressable advertising continues to be reach. I think the purveyors of addressable solutions are doing a good job of proving efficacy and ROI, but they continue to be handicapped by scalability. Advertisers continue to be challenged with the problem of piecing together reach from multiple sources. I think a little less than a third of households are linearly addressable right now and I’ve seen studies that suggest approximately 75% of all US households will be enabled by 2020.
Now, I’m just guessing here, but it looks to me like Rovi alone has at least some kind of relationship with enough cable and satellite providers and hardware manufacturers to feasibly be in a position to deliver maybe as much as half of that projected universe. That’s pretty good if you think about it – and surprising given that it’s not a household name. But now it is aligned under the banner of TiVo, a pioneering hardware manufacturer whose name effectively became a verb almost overnight, and I think there’s an insane amount of potential here.
So, there are three outstanding questions. The first is how well the company will capitalize on an open market for set-top boxes.
Second, how quickly will it be able to scale its advertising offering? That TiVo nearly squandered its “verb” status and missed its opportunity for ubiquity and that Rovi has tended to fly under the radar gives me some pause, but I’m guessing neither entity is in the mood to squander a second chance.
The third question is, will the FCC even open the door on this second chance? It’s going to be interesting to see how this all plays out.
Now on to important things – do you think my smart TV and Amazon Echo talk to each other when I’m not there? They do, don’t they? I wonder if they could train my dog…