Opening up a new source of revenue and perhaps a can of customer ire, TiVo confirmed that it is rolling out a new product that inserts pre-roll ads in DVR recordings.
TiVo is testing it now, but it won't be long before it becomes part of its retail platform. In addition to creating a new revenue stream, the new advertising inventory could help to subsidize the cost of TiVo's retail hardware.
"DVR advertising is going to be a permanent part of the service," a TiVo spokesperson said in an emailed statement to Light Reading. "We expect to be fully rolled-out to all eligible retail devices within 90 days."
TiVo also confirmed that customers will be able to skip those pre-roll ads in much the same way they can skip commercials inserted in TV shows and movies recorded to the DVR. The change appears to be largely focused on retail devices running TiVo Experience 4, the company's current-gen software and services platform.
Update: TiVo's Roamio, Bolt and Vox devices are the initial models that will be eligible for the new pre-roll ads, the company said. It's also expected that the new ad offering will also be supported by the TiVo Edge, a next-gen device that has recently surfaced, but a product not yet formally announced by the company.
"We're dedicated to innovation that helps our customers stay in control of how, when, and what they watch," the spokesperson said. "Advertising is an important part of every media business and TiVo is investing in new advertising experiences. We have designed our new DVR advertising units with the ability to 'skip' ads anytime a customer hits 'skip.' This is part of our ongoing commitment to bring our users the best media discovery experience possible."
Update 2: Ted Malone, TiVo's VP of consumer products and services, posted a few more details about the pre-roll ads Monday on the TiVo Community forum. Calling it a "broader initiative to modernize TiVo's consumer business model," Malone noted that the ads will be served dynamically in front of a recording playback, but stressed that recordings from "certain ad-free networks" won't be fitted with pre-roll ads. Given the dynamic nature of the ad serving, commercials also won't be inserted at times when the slots are not purchased. He also confirmed that the pre-roll ads can be skipped and that TiVo intends to optimize the experience moving forward in order to "reduce latency and improve performance."
Malone also dropped a hint about the coming TiVo+ service, which will "include dozens of channels of free entertainment." TiVo has not announced the content partners that have jumped on board at this stage.
Details about TiVo's new ad plan started to surface last week, with ZatzNotFunny gadget blogger Dave Zatz catching wind about a coming offering called TiVo Plus that appears to have some similarities to Roku's ad-supported The Roku Channel and services like Tubi.
This week, a member of the TiVo Community Forum posted an example of one of these new pre-roll ads, noting that they appeared to be "SD low bitrate videos" and that different ads showed up on other DVR recordings. Here's that example:
TiVo has not announced if it might extend this to the platform it offers through cable operator partners, but Zatz speculates that it's just a matter of time. "[P]re-roll ads and commercial replacement are exactly the sort of the thing the cablecos wants to offer, so us retail customers may not even be the ultimate target audience," he wrote.
Early response from TiVo customers not so hot
Consumer acceptance is another question. Based on some of the responses on the TiVo Community Forum, customers aren't crazy about the idea.
"It's not enough they have our viewing history to sell for a profit, they now have to target us with ads," forum member "JackMcC" wrote.
"Have not gotten those ads, and they would be totally unacceptable," added another forum member, "MikeGuy," noting that he might give the Amazon Recast DVR a look.
"This is truly horrifying…," yet another member, "PSU_Sudzi," wrote.
TiVo's decision to build pre-roll ad inventory arrives as the company prepares to split out its products business and its licensing and intellectual property business. It also enters view as TiVo prepares to introduce a new wave of products.
TiVo Plus will reportedly launch next month. TiVo also has a device refresh underway with the Edge, with models on tap for both cord-cutters and users who get digital cable TV services that support both Dolby Atmos and Dolby Vision HDR. David Shull, TiVo's new CEO, told CNN that the company next year will introduce an Android TV-powered streaming dongle that will sell for about $50.
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— Jeff Baumgartner, Senior Editor, Light Reading