Field Reports1 Sep, 2008 By: Thomas Haire Response
Consumer Ability to Skip Ads Could Get Easier
By Jacqueline Renfrow ([email protected])
NEW YORK — A recent decision from the U.S. Court of Appeals for New York could make it easier for viewers to skip ads on television, reported AdAge.com
The court overturned a ruling that had blocked Cablevision — and by extension, other cable providers — from making use of a network DVR that would allow it to run a massive video-storing operation from a single location rather than installing individual DVRs in subscribers' homes. The technology allows viewers to record programs through remote controls without a special set-top box.
"With the stroke of a pen, the U.S. Court of Appeals has opened the door to a massive increase in the penetration of DVR capabilities," wrote analyst Craig Moffett of Bernstein Research. "In short order, effective DVR penetration could now jump to north of 60 percent of cable households (that is, all digital cable subscribers) with an even larger increase in DVR outlets per home."
At the end of the first quarter, about 26 million homes, 23.4 percent of all TV households, had DVRs, and nearly 30 percent of digital set-top boxes and DVRs were installed in 2007 with at least one other set-top box already in operation.
As a reaction, advertisers are pushing more and more for a commercial ratings program, which would have them pay for the number of viewers who see their ads, not the TV shows they surround. According to a study of TV consumers in the United States, Europe and Asia, from the Oliver Wyman consulting firm, 85 percent of DVR owners are skipping at least three-quarters of commercials. However, two-thirds of those viewers are not willing to watch any ads at the beginning of a program in order to watch uninterrupted or pay anything to have commercials completely removed. By the end of 2012, an estimated 37 percent of all TV households will have a DVR.
While there are still more steps before Cablevision can roll out its DVR service, media companies involved with the law suit, such as Turner Broadcasting, 20th Century Fox, CBS, ABC and NBC, plan to appeal. The companies object on the grounds that the storage technology infringes on their exclusive rights to air and reproduce the content in question.
Harrington Brothers Refocus on OmniReliant Business
By Thomas Haire ([email protected])
Amicable split from ResponzeTV deal is reached, allowing the long-time DRTV players to turn attention to OmniReliant, OmniResponse and TVGoods.com.
Recent rumblings out of St. Petersburg, Fla., and the United Kingdom regarding ResponzeTV PLC and its American arm, run by long-time DRTV industry leaders Tim and Kevin Harrington, were muted on August 5, when the Harringtons announced their resignations from ResponzeTV. In the same release, the Harringtons announced the formation of TVGoods.com, a new company, and its entry into a consultant agreement with OmniResponse Inc., a wholly owned subsidiary of OmniReliant Holdings Inc., which they'd founded in late 2006. The companies also announced the acquisition of the former Keyframe Studio facilities (33,000-square-feet of production space on a 5.5-acre lot in Clearwater, Fla.), renaming it OmniComm Studios. In late August, Response caught up with the Harringtons, as well as Grahame Farquar, ResponzeTV's chief financial officer.
RESPONSE: Kevin, what happened between between the Harringtons and ResponzeTV?
KEVIN HARRINGTON: We've spent 25 years in this business, and one thing you learn is that you never know what's going to happen! What this boils down to is a clash between entrepreneurs — Tim and me — and our style of business and the London stock exchange, where ResponzeTV is listed. It's difficult to run an entrepreneurial business when that business is also publicly traded. ResponzeTV had $2 million in sales in 2006. After we took over in January 2007, the company had a string of successes — Magic Jack, Franklin Mint, Tony Little, all in 14 months — and sales reached $23 million in 2007. The company was a little stunned with the success. They brought in a new CFO on May 1, Nigel Harris, who took a look at our books.
TIM HARRINGTON: He saw the agreements included different points and residuals with different people — producers, product finders, talent, etc. He was not used to this type of business, especially with a publicly traded company. He couldn't quite get his arms around it, so he ordered an internal audit
KEVIN HARRINGTON: There was a board meeting and things got a bit abrasive. We didn't see eye to eye with Nigel, nor he with us. He left the company just 20 days after he started. But, in that short time, he turned the company upside down. The stock was pulled from the market due to his internal audit — that was the worst part of what happened to the business.
TIM HARRINGTON: To be clear, there were no outside government or stock exchange inquiries. It was an internal audit — a private matter in a public company.
What steps did you take to end the relationship with ResponzeTV?
KEVIN HARRINGTON: Our agreements were initially up at the end of 2008, but we decided it would be best to move the process along earlier. When Nigel left, he was replaced by the original CFO when we came aboard, Grahame Farquar. The split happened amicably.
GRAHAME FARQUAR: The solution was amicable. When I returned, working with Kevin and Tim, it was clear that they've had their own company and style for years. It's a very entrepreneurial business, and sometimes that doesn't fit well with the rigors of an overseas public company.
What is the relationship between OmniResponse, OmniReliant, TVGoods.com and OmniComm Studios?
KEVIN HARRINGTON: We've refocused our efforts to the Omni brand, which we founded before merging with ResponzeTV. OmniReliant has raised $17 million — the company was built originally around the Kathy Hilton product brand. With some of that money, we bought the new OmniComm Studios building in Clearwater. We've already had a couple of major DRTV players shoot shows there. We've shot there ourselves for 14 years. So it made perfect sense to buy the studio when it became available.
Who is staffing the new business?
TIM HARRINGTON: As part of our deal with ResponzeTV, with Grahame's approval, we were able to take some key players of our staff with us to the new business. We have a full staff as part of the OmniReliant re-launch.