At the IAB Engage conference yesterday, James Murdoch described his vision for a converged Sky and announced the launch of Smart TV sometime next year.
Smart TV is a system that turns the Sky Plus box into a local ad server. A partition on the hard drive is reserved for advertiser content. Sky already knows your name and address. Using behavioural targeting across their platforms they will be able to tell what you are in the market for.
Been watching a lot of kids programmes for the first time? Looks like you've just had an addition to the family - might well be time for a bigger car; browsing for holidays online using Sky Broadband? Looks like you could be open to an offer on a cruise.
So, having modelled you individually, when you sit down to watch Lost, the Sky Plus box will serve you ads individually, specifically based on this information, in the breaks.
Welcome to the age of TV as a direct medium, almost exactly as we've discussed it before - the online model transferred to television.
Except in the model we were talking about, you would register your preferences. With Sky, they'll be watching what you watch, recording what you look for online, and then serving you ads individually.
The question becomes, how much private information are you willing to give up in return for more relevant advertising?
PS. You can read more from the conference on the now obligatory conference blog.