The Impact of DVR Playback

From time to time, I am asked how I think DVRs are affecting outdoor television and especially how time-shifting has affected commercials as a whole. I didn't want to give just my opinion so I did some research-

Playback from Digital Video Recorders (DVRs) is increasing the amount of time people spend watching television, according to new data from The Nielsen Company. In comparing total television usage (Live viewing plus DVR playback) for persons 18-49 in November 2007, to total television usage in November 2005 (before Nielsen measured DVR homes and penetration was very low), Nielsen found that viewing had increased slightly throughout the day and was three percent higher at 9:00 pm and five percent higher between 11:00 pm and midnight. This has implications for prime time viewing levels in the future because as the number of DVR households in the U.S. population grows, DVR primetime viewing will likely rise as well.

We all know that consumers/viewers are watching more television because of DVR playback, and in reality, they are creating their own personal television schedules based around their favorite programs and interests.

Providing new insights into time-shifted audiences, Nielsen identified three distinct groups of DVR users based on how much they time-shift:

• Heavy Shifters are primarily middle income women, ages 18-49, who record and later watch nearly 26 hours of televison - or about half of their TV viewing - a week. Males, 18-34, are least likely to fall into this group.
• Medium Shifters watch somewhat more televison than the average person; about a third of their viewing is time-shifted.
• Light Shifters, who represent nearly 70% of all persons in DVR households, watch less televison than the average viewer. With incomes that exceed $100,000 and the most prone to own a high-definition TV set, they spend only about 10% of their television time with time-shifted programming, watching shows they would otherwise have missed.

Nielsen also reports that time-shifting is not evenly distributed by forms of programs. As would be expected, most viewers prefer to watch news, sports and movies live. On the other hand, general dramas, such as House, Grey's Anatomy and Heros, are most often recorded and viewed later, for one-third of all time-shifted content. Among other types of programming that is heavily time-shifted are talk shows like Oprah, soap operas like The Young and Restless and reality televison shows such as Survivor, The Biggest Loser and Dancing With the Stars.

So, how does all this relate to outdoor televison? Frankly, outdoor advertisers are getting a great deal for their ad buys on average. Outdoor televison is reality TV at it's best and consumers are DVRing the shows right and left as well as watching them live. Having a good airtime is nice but not totally essential. From an advertiser's angle, you want to be involved with programs that are more engaging. Typically what happens in a show that is more highly engaged - where people spend more time focused on it - the attention to the ads is higher. Generally, the attention to the ads depends on the strength of the creative, but a good commercial in a highly engaged show will perform better than a good commecial in a show that is not highly engaged. So you want both. I also believe you can purchase block time from the networks and request to run these commercials next to the programs of choice but those companies that are promoted and a part of a popular program over time will come out the big winners.

Broadcast and cable networks are paid based on their programs' ratings(this is unusual for outdoor television), and are pushing forward with their annual upfronts(time buys), with some kicking off as early as this week. Some of the networks are even pushing for "live plus seven", this shows the strength of DVR statistics. Last year, despite having to cut deals based on a new currency, which included three days of DVR statistics (The C3 metric was adopted last year), as well as live viewing, networks were able to squeeze out increases in upfront sales, closing the market with $9.19 billion committed from advertisers. This was up 5% from the year before.