Let us suppose that every house hold in america got Tivo tomorrow, and nobody watched a single ad. TV other than HBO type channels would be radically altered.
Most people want to watch live events live however, so tivo or no, there still will be commercials being watched. However if 50% less eyeballs are looking at each ad, then the ad companies will only pony up half the money. In actuality, it will be bad enough in a real life situation.
The exact demographic that the advertisers are trying to reach (upwardly mobile 18-34 year olds) are the people who will be early adopters of Tivo. When the only people watching commercials for Mercedes Benz cars are social security collectors and poor folks, Mercedes will put their ad dollars elsewhere.
Companies advertise for many reasons. A person could equally argue the opposite of what you said and still make sense. If 50% fewer people are watching TV, then companies will pay MORE for their ads because the individual VIEWER will be MORE RARE and more desperately courted...
There is a lot of mythology surrounding advertising. I suspect the bottom line is that Fortune 100 corporations need to 1) transfer billions of dollars among themselves and "advertising" gives them a handy excuse; and 2) empower various media fringe companies and hangers-on and "advertising" gives them a handy excuse. But I'm a tin foil kind of guy to begin with...
Mark W.