Amstrad chairman Sir Alan Sugar says the rise of personal video recorders (PVRs) will cause the death of advertising on television within the next 10 years. Writing in a new book, The Next Big Thing, looking at TV in 2015, Sugar says he has owned a PVR for a year, mainly so he can skip adverts.
In an extract published today by The Independent, Sugar says: "If I headed a commercial [television] channel, what would worry me right now is the device my own company makes, which is beginning to revolutionise the way we watch television in this country: the PVR.
"Within 10 years PVRs will be as ubiquitous and as cheap as the DVD player is today. Once you have tried one, you are never going to go back. One of the main reasons I own a PVR is so I can skip adverts.
"I haven't watched an ad spot for more than a year now. Everybody is going to be doing the same soon. So in my view, advertising has had it, on television."
Sugar said commercial channels would have to lobby regulators to allow product placement, and look to other new revenues to supplement those lost from PVR viewing. Viewers would still watch advertising-funding programming, so long as the shows were good enough.
"Advertisers and broadcasters must learn to be cleverer, and to persuade the regulators that sponsorship and product placement are in the long run essential for the survival of television as we know it."
Sugar warned: "Whatever the solution, my personal opinion is that the days of adverts on TV are numbered. If television cannot supply advertisers with the means to promote their products, they will spend their money elsewhere."
And he had this advice for those working in commercial television: "Get another job, because at the moment it is advertising that pays your wages. In eight or nine years' time, the advertisers will not want to pay you because no one will be watching the adverts. It is as simple as that. Defect to the BBC now."
Several research groups have issued findings supporting Sugar's claim. In September, media buyer Starcom said owners of BSkyB's PVR service Sky+ were watching 30% fewer adverts than other Sky digital subscribers, though awareness of advertising brands appeared to be holding up.
In June, US consumer goods giant Proctor & Gamble sent shockwaves through the advertising industry when it announced it was switching 25% of its planned advertising on cable networks and 5% on broadcast networks to other forms of television marketing such as product placement.
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