Frankly, its a brilliant patent, and could represent the long tail of network TV advertising finally having a means of existing. Because television always has been a broadcast medium, ads are always seen by the entire audience, making ads during highly-watched programming enormously expensive, and inaccessible to smaller companies and ad budgets. With this system, all the ads can be server locally, by the DVR, letting the entire audience see different ads, and thus let advertisers bid on a portion of the audience.
Even live programming could use this patent, replacing the regular ads with bidded, targeted, long-tail ads. Early adopters could see ads for internet startups that would normally never buy TV ads; kids would see ads for toys and junk food; soccer moms would see ads for food and clothing sales; lawyer dad could see ads for suits; teenage boy would see ads for video games. Split up the audience, and you could save TV advertising.
Why do users skip TV ads? Because most of them are useless, broadcast to everybody and reaching nobody! I don’t like car commercials (unless they have cool music), or yeast infection cream, or Tickle Me Elmo, or makeup; and every time I see those ads I want to skip commercials entirely. If I knew that Microsoft was serving me ads, and that those ads would be targeted to me every damn time, I’d want to see what was going on.
Broadcast ads used to work, but the audience is getting more savvy and technology is skipping ahead. Fix the ad system, or the $60 billion+ industry will dissapear. Google is working hard to solve this problem, but Microsoft already has the technology and infrastructure to roll this out to Media Center users. Get the system running and successful, get the networks on board, and you can expand it to the other companies.
The money is in the platform. Use Media Center for testing, but own the ad platform on your competitors as well. Nail this one down, and Microsoft will finally be going somewhere in the ad world.