Welcome to Rye Country Day's Economic Blog. Here you will find perspectives by students taking Economics at Rye Country Day School. It is meant to be a forum where students can openly express their ideas and take positions on relevant economic issues. I urge everyone to participate in presenting their own ideas in an open manner so that we can all learn from each other. Regardless of whether you are currently taking Economics, everyone is invited and encouraged to comment on articles and get involved. Feel free to e-mail me, Alex Osborne at firstname.lastname@example.org , with comments or suggestions.
Thursday, January 18, 2007
Featured Entry - Tivo, the Best Thing to Happen to TV?
On the surface Tivo appears to be on of the best ideas for television in a long time. The customer can record his favorite show and then watch it at a more convenient time and just fast-forward through those borting and time-consuming commercials. Now, as we look deeper into the impact of Tivo on the industry there is a major loser in this new technology. The companies that advertise on television programs can deal with it, they can find other ways to spend their money. The group that will feel the biggest impact of the Tivo phenomenon is the television networks. With Tivo's increasing popularity, networks can no longer demand the same money from companies to advertise on their programs with the knowledge that there is a chance their commercial will not be seen. I think it may be too early to think about price controls. Although this could be a bigger problem in the future, TV networks have two things still working in their favor that will keep them afloat for the time being. At this point, Tivo is not yet in every household in America, most likely due to its price or the reluctance of people to deal with the technology. Secondly, networks have the luxury of charging a lot for advertizing spots on live programs like sports, where Tivo has less benefit. The whole thing has sparked great competition between networks for the big live games because they have become the most sought after shows as people are more likely to be glued to the TV set for three hours. Clearly one side would say no to the question raised by the title, it is like anything where there are two sides to the debate but in this case only one side matters, that of the customer, for they dictate and it's the responsibility of the networks to adjust.
- T. A. Canning