Commercials. To some these are signals to flip the channel or surf a different page, to others they are a source of amusement. Either way, there has always been an industry for making commercials and a counter-industry for getting rid of them. While advertisement blockers have been around on the web for a very long time, there is a new type of commercial avoidance technology that may reshape digital cable: commercial hopping. The question, simply put, is will companies like Cox and Comcast face a similar challenge or will commercial hopping turn out to be just like advertisement blocking is for web surfing? To answer that in an educated fashion, a little education is required.
Understanding the Role of Advertising
Advertising is a massive industry and companies spend enormous sums of money to advertise their goods and services. Money starts being spent from the time that marketing teams meet with marketing experts to the production crews, to spokespeople, and the list just goes on. This brings us to the first and best lesson: There are many, many, many lives that depend heavily on advertising.
The second lesson is that the average consumer is touched by advertising as well. Advertisers offset the costs of studios and digital cable providers by paying for advertising time during programming that they believe their target audiences are watching. The result is a significant offset to the price it takes for digital cable to reach each and every consumer, but it all hinges on the fact that companies believe that they are spending their money wisely to reach a target audience that will be sufficiently impressed to start buying.
What Happens When Buying Doesn’t Occur
When this does not happen companies look at several culprits. There are countless things that can go wrong with an advertising campaign, but an advertisement blocking technology could render an entire re-evaluation process completely moot. With something as fundamental as an advertisement blocking technology in place, advertisers could very well pull the plug on an entire industry. If such a thing were to happen there could be a massive economic consequence in the long run, but in the short run the bottom line is that the subsidies that eventually reach consumers would dry up. Long story short; advertisements help keep prices down.
When Dish Network announced the hopper, they may have opened up a veritable Pandora’s Box that enables whole home DVR usage on up to 6 streams and up to 2000 hours of television with one little catch: a feature that automatically detects and allows users to skip over commercials. While the technology is not entirely flawless, it is certainly a gigantic move in a direction that has already been tried on the web with advertisement blocking technology. Most prominent websites do not offer free content to people using the technology because those advertisements are what makes creating and running such a site lucrative. Freeloaders trying to get without giving, even in a passive form, are not welcome on the web…so how will they be viewed on the T.V. set?
Moreover, how will Dish Network and anyone else willing to imitate seem to companies with an advertising budget to spend? Normally television advertisements are a perfect way for them to reach an audience that they know a great deal about. Their viewers have 3 choices: watch, use the restroom, or flip the channel. Knowing what else is on determines how likely the third option is, and there are only so many bathroom-like excuses, so it would seem like the first option would be highly favored. But if there was suddenly a way to avoid having an impression made, then the scales would be completely thrown into chaos. If someone that was being paid to be part of that money making process were to be responsible for the paradigm shift, it would seem likely that raw fury would be the result.
Whether or not the issue could be redressed is a good question, because ultimately this is a win-win-win situation that ought to be resolved. Consumers get to learn about products and services that improve their lives, the advertising industry stays intact, providers get to offer better deals on services, and companies get their word out. When this balance is upset, via technologies like the Hopper Auto Hop system, everyone stands to lose.