AD-KILLING SET-TOP BOXES REP NET THREAT, CRONIN SEZ.
CHICAGO Commercial-free viewing might not be limited to public broadcasting audiences anymore--and the prospect has cable networks restless.
New set-top boxes that allow viewers to digitally record shows and watch them later with the commercials removed are the biggest threat to TV networks, said Rich Cronin, Fox Family Networks president & CEO.
"The TiVo-Replay thing is scary," Cronin said at the Cable '99 panel "It's 11 O'clock: Do You Know Where Your Target Is?" to examine niche advertising and future technology. "It can change TV as we know it," he emphasized.
The fear is that advertisers will not buy ads in programs that viewers store in advanced set-top boxes developed by TiVo, Replay Networks and WebTV.
Speaking from the audience, Myers Report prexy Jack Myers estimated that in five years, 40% of cable subscribers could have the TiVo system in their homes.
Those statistics put fear in the hearts of cablers because of the niche markets they attract.
Niche at risk
Panelist Betty Pat McCoy, national broadcast VP for ad agency GSD&M, said she mostly avoids buying time on niche cable networks for her clients because she believes that, given the reach they maintain, the broadcast webs are a more effective way to get messages out.
MTV prexy Judy McGrath countered by noting small niche networks can create quite a buzz with just one hit show. As examples she cited "South Park" on Comedy Central and "Emeril Live" on the Food Network.
"If you can capture the pop gestalt of the moment, you can really wield a lot of clout with a small audience," McGrath said.
Barry Schoenfeld, partner & director of strategic planning for ad agency Asher & Partners, agreed that niche cable webs do have potential value as ad vehicles for his clients.
"As long as there is an audience drawn by the programming of niche networks, advertisers will support them," Schoenfeld said.
But attracting that audience can be costly. Brad Siegel, prexy of TNT and Turner Classic Movies, noted a major challenge faced by all cable nets is the inordinate amount of money they need to spend on off-air advertising. "We have tremendous marketing budgets because we don't have the big audience that the broadcast networks have," Siegel said.
Comedy Central prez Larry Divney moderated the panel.