According to Investor’s Business Daily, several major cable companies have launched an advertising start-up called Canoe Ventures that is developing the technology to record and analyze cable subscribers’ viewing metrics. As part of this plan, Comcast is reportedly building a “500 TB TV Warehouse” to store the aggregate habits of its 16.8 million digital cable customers.
Canoe has the potential to bring television advertising techniques up to par with their online counterparts, which have for years enabled websites to tailor ads to individual visitors. While cable companies haven’t used digital set-top boxes to collect viewing metrics until fairly recently, the concept of tracking television viewing habits isn’t new. For several years, TiVO set-top boxes have logged these habits without any ensuing privacy violations. And last May, Charter Communications began selling set-top box data to Nielsen Media Research so it could analyze the viewing statistics of Charter’s Los Angeles-area cable customers.
It’s a near-certainty that Canoe will have privacy activists up in arms, warning us that consumer privacy is under siege and calling for regulators—or Congress—to act. But as always, privacy risks must be balanced with the wealth-creating upside of targeted marketing. Data mining can indeed co-exist with effective privacy safeguards, and disciplined firms must be allowed to experiment with intelligent methods of matching buyers with sellers.
The initial details of the Canoe plan as explained by Comcast reveal a fairly tame system unlikely to pose much of a threat to viewer privacy. The system would collect data on an anonymous basis, meaning it wouldn’t be possible to tie a specific individual back to a set of viewing records, and logs would be purged after a year. The specifics of this plan are still being worked out, but Time Warner Cable said in a statement that Canoe will have anonymization built-in.
Why should we take the cable companies at their word? For one, the very real threat of insider leaks (and subsequent public backlash) means that cable companies are sure to think twice before being anything less than forthright about their plans. Besides, cable companies already learned their lesson about transparency when Comcast’s concealment of certain technical details surrounding the Sandvine network management system spurred a massive public relations fiasco.
Anytime a new data mining system is put into place, there are always accompanying privacy risks. Yet the benefits of data mining can be quite significant, and displaying more relevant ads can be a boon for consumers and corporations alike. Some people are really worried about privacy, and they may wish to err on the side of safety and subscribe to television providers (like DirecTV) that can’t track viewing habits. Or perhaps cable companies might allow users to opt-out of data collection.
Either way, those of us who can live with a remote risk of our viewing records being compromised should be able to enjoy lower cable TV prices, less obtrusive ads, or better television shows—all of which are potential upsides to targeted advertising.