TiVo, I think, is the best product I've ever owned. I use it more than any luxury/entertainment product with the possible exception of my computer. This is true even though I really only use two of the little black box's features regularly. I use it to record and pause shows so I can watch them at my leisure (stay up until 11:00 to watch the Daily Show? Nah. TiVo will get it.) and I use it to fast forward through commercials.
It's this latter feature that has a lot of TV execs --and, honestly, the people at TiVo themselves-- nervous. In a way, it's like killing the obnoxious, tacky goose (Aflack!) that lay the golden TV-shaped egg. Despite that most people dislike it, advertising keeps television on the air. And if nobody is watching the ads thanks to TiVo or similar digital video recorders (DVRs), then something has to either adapt or die. Yay Darwinism.
Thankfully, there are people trying out new ideas. TiVo already has space in its system menus for advertisers to pitch products and sweepstakes, as well as slots in its "TiVo's Showcase" recommendations areas that seem to be for sale. And according to this story they're experimenting with something that lets viewers "click through" traditional ads to watch short (3 minutes or so) videos about a particular product that interests them. They then return to their show where they left off. Not interested in the product? Don't click it and continue on with your life.
This is smart, I think, because it lets advertisers really get at people who identify themselves as interested in a particular kind of product. Neat as it is, though, I don't think it alone will replace traditional TV ads. I could see clicking through to learn more about a new movie or what's on sale this weekend at Sears, but I doubt anybody's going to think "Wow, I'd really like to watch a 3-minute video about Hidden Valley Ranch Salad Dressing." I also think it would drive TiVo users away to competing services if they started popping up little icons during the shows.
Still, it's one step in the right direction --away from an advertising model that's been out of date for a couple of decades now.