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Advertising Adapts; how will TiVo respond?
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TiVo has been one of the hottest consumer product ideas of the last several years.  Because it allows you to record TV programs for later viewing, one of its important selling points was the ability to “fast forward” through commercials.

 

Now the people designing and paying for the programming have responded. A new variety show, sponsored by Pepsi and Nokia, will integrate advertising and content.  The program will be shown “commercial-free,” or more accurately, “commercially integrated.”  The advertisements and product placements will be a part of the show.   Click here for the New York Times article. 

 

This approach is an old one in television and radio, as the Times article points out.  Broadcasting started with “commercially integrated” programming – the soap operas got their name because of the sponsorship of companies like Procter & Gamble, Unilever, and Colgate-Palmolive.

 

In his recent papers and books, Harvard’s Prof. Clayton Christensen often talks about a cycle of modularity and integration in products and services. Here’s an example of a move away from modularity and back to integration. 

 

The reason? As with most modular (or “plug and play”) designs, it’s much easier for customers to strip out the things they don’t want (in this case, commercials).  It’s a lot more difficult to take out a commercial when it is also the program you want to watch.

 

As for TiVo?  It’s been doing very well, as a recent TiVo press release attests.  TiVo’s continued success depends in part on how quickly it can enhance its offering in response to the continuing re-integration of ads and content.

 

 

Innovation & Business Architectures -- Belmont, Massachusetts USA