Can Tivo Sell Our Private Information? (Third reading essay)

The impact of Digital Video Recorders (DVR) such as Tivo has been huge. The use of DVR’s changed the television industry as well as our daily lives. A DVR enables its users to record from thirty to hundreds of hours of television programs in its huge hard disk, and the viewers can then watch any programs stored in it whenever they want. This innovative technology has freed viewers from deciding which program they should watch. In other words, the DVR allows its users to disassemble the original on-air schedule and reprogram it freely. Besides, viewers can stop, forward, rewind or even skip the commercials. This new technology has the potential to end the “flow”, the programmer’s effort to dissuade viewers from changing channels by the thorough consideration of the programming schedule and the timing of the commercial interruptions.

With this new pattern of use, the DVR jeopardizes the old business models that are offered by companies such as the Nielsen Media Research which tries to accurately catalogue what viewers watch.  Tivo has a feature which communicates with a central database through the phone line and sends all the actions the viewer makes, from which channel they recorded to changes they made in the volume. The information sent from each Tivo is compiled in the central database. This function disrupts companies specializing in identifying people’s viewing behaviors by performing an intricate procedure of sampling. Under the diffusion of the DVR, their main business, assessing of the price of commercial segments, will no longer be meaningful.

Uprising of this formidable technology, the television and the media research industries have a couple of options to contend against it. Matt Carlson in his book, Tapping into Tivo, points to two ways to interrupt new technologies that can be a threat to the television industry. One is to draw those companies into law suits with complaints such as the copy right violations. It is not necessary to win the case. With their enormous financial resources, media companies can suffocate those rather small companies monetarily through legal efforts. This tactic was applied to SonicBlue, a company that attempted to sell DVRs with a function to skip commercials. With a series of costly law suits by seven companies that included Disney, NBC, Viacom, SonicBlue filed for bankruptcy before the law suit was settled.

 

Another way to interrupt new technologies is rather more friendly; gaining control of the companies by investing in them. As a matter of fact, a certain amount of Tivo’s shares are owned by NBC, CBS, Discovery and Comcast. Developing strong ties with those media giants, Tivo has chosen the way to cultivate a new market that can be profitable to both sides by collecting accurate information about people’s viewing habits and selling the data to media companies. This new strategy seems to be a very smart move. It solves the conflict between the television industry and the DVR manufacturers, as well as developing a new market of “people’s personal data”.

Many say that DVRs and the threat they bring to the television industry are similar to the Sony Betamax VCR, the first consumer video recorder that turned the television industry upside down thirty years ago. In the VCR case, the television stations and the movie companies backed off fighting with video manufacturers after they found that the profit that the pre-recorded video market created surpassed the loss that VCRs brought to the media industry.

 

Tivo and Betamax cases have one thing in common. Sony and Tivo ended up cooperating with existing media companies, such as the television and the movie industry, as well as the media research companies, and developed new markets with new technologies such as VCRs and DVRs. Carlson wrote, “The development of new media technology is far from independent from existing media structures.” I cannot agree more with him. What the SonicBlue case is telling us is that all the disruptive technologies can not survive without acting in concert with the contents creators, such as the television stations and the movie studios.  No technologies can thrive in markets without the consent of other companies and the consumers. Then one question comes up to me. When did they get the consent of us, the suppliers of their new commodity, people’s viewing behavior?

 

Carlson, Matt. Tapping into Tivo: Digital video recorders and the transition from schedules to surveillance in television, New Media society 2006; 8; 97