Is there a whole new meaning to the term "boob tube"? TiVo (Nasdaq: TIVO) tattled earlier this week that the Super Bowl's halftime show received twice as many viewers as the game itself.
If that news blip got you thinking, the rest of the story fell into place late Wednesday, when the company said it has signed an agreement with national ratings service provider Nielsen to market information to the television industry. TiVo, a Motley Fool Stock Advisor pick, said it will receive an undisclosed licensing fee from Nielsen. Privacy proponents will be relieved to know that the company will only track TiVo loyalists who "opt in."
The power of TiVo was evident in its post-Super Bowl announcement. According to the company, the Janet Jackson "wardrobe malfunction" incident caused "viewership [to spike] up to 180 percent as hundreds of thousands of households used TiVo's unique capabilities to pause and replay live television to view the incident again and again." Again and again, eh? Given the controversial nature of what happened, it's not too surprising, but it is a strong example of TiVo's power to track what viewers want to see.
The relationship between TiVo and Nielsen is not a new one. Back in Sept. 2002, Wired reported that the companies were conducting experiments to collect viewer data through their devices. Now, rumor has given way to a much more concrete deal, as well as an answer to one important piece of speculation. Namely, the idea of the death of advertising has been bandied about since TiVo's birth. But in addressing advertisers, the deal shows that maybe it's not the idea of skipped ads, but the ads that don't get skipped that advertisers need to think about.
(Several denizens of the TiVo discussion board have already been speculating about the Nielsen/TiVo connection before Wednesday's announcement. In fact, FrappuccinoFuel had already tuned right into the power of tracking popular ads.)
The announcement opens a lot of doors to speculation and ideas. Will networks such as General Electric's NBC (NYSE: GE) or Time Warner's (NYSE: TWX) cable stations go nuts for this opportunity? What about big-time advertisers such as Procter & Gamble (NYSE: PG), Anheuser-Busch (NYSE: BUD), or McDonald's (NYSE: MCD)? If they could find out what works and what doesn't, wouldn't they be "lovin' it"?
It's pretty interesting stuff, even though it may not change the competitive or financial outlook surrounding TiVo right now. If the privacy aspects don't add a little "fear factor" into viewers, it's an interesting new use for the machine.
Alyce Lomax does not own shares of TiVo, nor does she own a TiVo, though she knows some TiVo junkies and wishes she had one of her own. She welcomes your feedback via email.
Terms & Conditions
RSS Headlines
Fool UK