Audio Video News

Jamie Kellner, the Turner Broadcasting System chairman, who proclaimed that viewers have a "contract" with broadcasters to watch commercials, has predicted that digital video recorders could spell the end of free television programming. Kellner has been widely quoted as saying that viewers who "take too many bathroom breaks" are "stealing the programming."

Speaking at a recent gathering of the Television Critics Association held in Pasadena, CA, Kellner opined that personal video recorders (PVRs)—such as the TiVo and ReplayTV devices that allow users to skip commercials—could alter the business model for broadcasting and basic cable. Without the subsidies provided by advertisers, viewers could pay as much as $250 per year above cable or satellite subscription fees, he estimated. "Don't think for a moment there's a free lunch," he said about deleting commercials.

A recent survey shows that 70% of personal video recorder users routinely skip commercials. It's not known how many VCR users do likewise, but the practice is widespread. Kellner said that the proliferation of PVRs could affect the television industry the way file-sharing services like Napster affected the music industry. Fewer than 1% of television viewers have PVRs at present, but digital recording, fast-forward, skip, and review functions are being included in the next generation of set-top boxes.

At the rate they are being deployed, Kellner predicted the end of commercial-supported TV within ten years, with unforeseen results for the US economy as a whole. Kellner said he believes that his company could survive nicely even in an entirely fee-based environment. That may be partially because parent company AOL Time Warner is hedging its bets with all forms of technology and commerce. In addition to owning America Online, the world's largest Internet service provider, AOL Time Warner also owns Cable News Network, Turner Network Television, the "WB" or Warner Brothers network—and a 13% interest in TiVo.