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TiVo's new advertising model

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MARK AUSTIN THOMAS: TiVo's digital recorder is expensive to make, but the cost hasn't been passed on to consumers because the company has been working to increase demand. Diantha Parker says TiVo has an idea for recovering that loss.


DIANTHA PARKER: This week TiVo unveiled plans to boost revenue by selling ad space at the end of recorded shows and tracking who stays to watch.

Abby Klaasen covers media for Advertising Age. She says TiVo will have to walk a very fine line to make this work.

ABBY KLAASEN: It can't tick off its subscribers who pay money every month for the service, and who expect to be able to fast forward through ads. But it's also trying to appear like a friend to Madison Avenue, you know, it's trying to turn itself from a foe into a friend.

It's a risky strategy, Klaasen says, but she points out that advertisers can't turn back the clock to a pre-DVR world.

They can't beat TiVo, she says, so they've gotta join it, to find a format to replace the traditional 30-second spot.

I'm Diantha Parker for Marketplace.

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