TiVo’s Tom Rogers on Consumer Choice

In the Connected Entertainment keynote at MIPCOM, Tom Rogers, the president and CEO of TiVo, spoke with World Screen‘s group editorial director, Anna Carugati, about how the company has revolutionized the TV-viewing experience.

"The best way to describe TiVo is it gives you total control over how you watch television," Rogers said to attendees in the crowded Grand Auditorium at the Palais des Festivals. "In the United States it’s become totally integrated with pop culture," he said, before introducing a clip reel of references to TiVo in a host of different TV shows.

Discussing the evolution of the company, Rogers noted that today, the TiVo device not only gives consumers access to traditional, linear TV—it also delivers online content, striking deals with Netflix, Amazon.com, YouTube and a host of other providers. "In the United States now, we’re delivering somewhere between 5 and 6 million pieces of content that you can’t get through cable or satellite…. [We say] let everything get through, get everything up there so it’s at the fingertips of your remote control. The consumer determines what they want to watch."

When asked about Hulu, Rogers said: "We’d certainly like to have Hulu available through the television screen, so far Hulu has not authorized its distribution to the television screen. I think ultimately for that model to succeed it must do that and when it makes that decision we hope to be part of making it [part of] the get-anything-you want, whenever-you-want TiVo experience."

DVR penetration in the U.S. is today at about 35 percent, and Carugati noted that the rate of growth has slowed recently. "Rates of growth as technologies mature are somewhat misleading because the bigger the base, as you add more, the lower the growth rate," Rogers stated. "The real thing to look at is the absolute number of homes that have DVRs and it continues to grow quite rapidly…. Most analysts predict that in the next few years, there’s going to be somewhere between 50 and 60 million homes. When you get to that kind of level you’re probably talking about 75 percent of the homes advertisers really care about reaching. It’s hard to predict the future but our view of predicting the future is to be the ones making the future happen and the way we see it, betting against people having control of the television experience through a combination of DVR recording technology and broadband connection to the TV…would be a bad bet."

Discussing how the TiVo service is distinctive, Rogers said that the device’s "secret sauce" is making "interaction and interactive TV not something that is geeky, not something that is techy." The service, he says, is "truly simple, so that the average couch potato could look at it as no different than the ease of use of turning on the TV, lying back and using the remote control. I used to say as people were talking about interactive television in its development that it’s kind of like teenage sex—everybody was talking about it, everybody thought everybody else was doing it, but nobody was doing it well. We’ve graduated to a point where we’re doing it very well. Like the Samantha character on Sex and the City. We know what’s involved in doing interactive television well and doing it well means it is easy, simple, entertaining. What that really means with TiVo is that you have one box, one remote, one user interface for everything: linear television, traditional TV channels coming in, as well as broadband-connected channels, access to millions of pieces of content that are there with the push of a button. A one-stop shop for any service. It means that whether something is being downloaded or streamed, whether something is advertiser-supported, subscription-supported, pay, á la carte, on demand, or some combination of those things, that any business model can be supported from any provider of content."

He continued: "The consumer has to be able to feel as if the entire world of choice is available to them. They will then decide how to make that experience one that is personal for them and they get what they want when they want it. There are a number of implementations of broadband to the TV: some from television-set manufacturers, some from specialty box players, the key thing we’ve tried to do is make universal availability. You have a single interface. The consumer doesn’t care if something is broadcast delivered or cable delivered or broadband delivered."

Asked about TiVo’s impact on the ad community, Rogers said that the company was once the "pariah of the advertising world. When people saw just how easy it was to fast-forward through a commercial, ad agencies [said] hey, get the hell out of here, you’re undermining the business model of television."

Today, the idea of consumer control of the viewing experience has taken hold in the U.S., Rogers noted. "Once you’ve experienced the ability to watch TV without that kind of [commercial] interruption, it’s very difficult to go back. We now collect about a billion pieces of data a day off TiVo boxes. We know every second of what is being watched, including commercial viewing. It is very clear that the tolerance of viewers to watch commercials in the middle of programming is disappearing."

Discussing the findings of TiVo’s research, Rogers said: "You would think that the most popular programs get the highest commercial ratings—that the commercials in those programs would be the most likely to be seen. But the correlation doesn’t play out that way. In fact, only a commercial or two of the most popular shows in a given week actually are the top-rated commercials of the week. There’s a lot of choice going on by consumers of what they’ll watch, when they’ll stop and not fast-forward through it. Even in a key show like a Grey’s Anatomy, when people are fast-forwarding through ads, there will be a 2.5, 3 to 1 ratio of the rating of the most-watched commercial versus the least-watched. Even within a show there’s a lot of choice going on about what people will stop and watch."

He continued: "We see our role here as not only redefining the consumer experience, but providing the tools for a business model to emerge so that as this consumer experience becomes broadly penetrated that the industry has a way to respond and develop what we think will be an even healthier business model."

Discussing what’s ahead, Rogers noted that DVR penetration in many international markets is still small, but, he said, "my view is, don’t mistake small with [small] impact. If you’ve got to be convinced about how something small can make a major impact, think about being in bed with a mosquito. It may be a really tiny thing but disruptive as all hell. That’s what we see playing out. Something that may only look like the beginnings of a small issue will have vast impact across the industry. If I look at the example in the United States, on the one hand, the potential for the impact of television for advertising and marketing can be bigger and better than ever before. HD, huge impact, interactive advertising, the ability for consumers to control what they want, when they want it. Opportunities galore."