NAB: Will DVRs thwart rise of online TV shows?

LAS VEGAS--Big TV networks are rushing to attract Internet audiences, but there are signs that the payoff won't be that sexy.

One of the burning questions television broadcasters face is whether the Web can be mined for big advertising dollars. NBC Universal, CBS, and Viacom are just a few of the media conglomerates moving quickly to offer full-length TV shows over the Web.

What will surely be debated here this week at the National Association of Broadcasters' annual conference--which gets rolling on Monday--is whether the masses will welcome TV on a PC.

Actor Tim Robbins

What about commercials? Will audiences resent being forced to watch commercials online, when TiVo and other digital video recorder, or DVR, models enable them to skip ads on plain-old TVs?

Earlier this month, Toronto-based Convergence Consulting Group released a report (PDF) skeptical of TV's prospects on the Web and urged cable, satellite, and broadcast executives to stay focused on their traditional businesses.

"There is no current economic rationale for broadcasters and cable networks to abandon traditional TV or attempt to accelerate a transition to a total online model," the group said in its report. "To do so would put $66 billion in traditional TV advertising revenue and $30 billion in cable, satellite, (and telecommunications companies') TV provider programming fees at risk."

One of the main sticking points for online TV shows is commercials. TV executives are using the technology to once again ram ads down the throats of viewers. Convergence argues that in head-to-head competition, the public will choose traditional TV and commercial-zapping DVRs over watching on the Web.

The "bottom line," Convergence wrote, is that "the DVR will limit full-episode online viewing."

Meanwhile, NBC Universal trumpeted an important milestone last week. Hulu, the video portal founded by NBC and News Corp., sold out of available ad inventory after being open only a month. NBC President Jeff Zucker announced that Hulu is looking for ways to make more ads available.

Director Doug Liman

In addition, the Associated Press reported Saturday that networks are getting better ad rates for Internet distribution than they are for traditional broadcasts.

"Advertisers pay more online because there is a better accounting of how many viewers see the ads," the AP wrote. "An extra benefit that an impulse to purchase can be acted on with the click of a mouse."

NAB notes
Actor Tim Robbins, star of the "The Shawshank Redemption" and "Mystic River" is scheduled to give the opening keynote address at NAB. Robbins will speak about how new content and distribution methods will impact Hollywood.

Other notables due to speak at the conference are Jeffrey Katzenberg, CEO of Dreamworks Animation; Doug Liman, director of The Bourne Identity; and Jason Kilar, CEO of Hulu.