Behind the gains in time-shifted viewership; It's way up on broadcast, and it's not just from DVRs

Medialife Magazine By Diego Vasquez March 22, 2013 The broadcast networks have seen seven-day DVR viewership shoot up this season. Last year 77 percent of broadcast viewing was live; this year it’s down to 71 percent. More people have DVRs now than last year at this time, 47 percent versus 43 percent, which explains some of the gains. People are also getting more comfortable with time-shifting. But another factor to keep an eye on is the rise of video on demand viewing, a function provided by most satellite and cable providers. If a VOD show contains the same commercials as the original broadcast, it can count toward the Nielsen rating. Most notably for advertisers, the fast-forward function can be disabled on these broadcasts so that viewers are forced to sit through the commercials. Networks may start pushing harder on VOD because it is measurable, unlike tablet and mobile viewing. Stacey Schulman, chief research officer at TVB, talks to Media Life about the advantages and disadvantages of VOD for advertisers, why broadcast ratings are down, and whether C7 ad buys are in the offing. How much of this season’s broadcast ratings declines are attributable to time shifting? It’s a good question, and it’s not an easy answer, frankly. We know what the numbers look like in the context of, say, last year. When you compare the time-shifted portion of the audience, live versus live+7, we’ve gained about 2 percent more time shifting, and with cable it’s about 1 percent. But it’s not an apples to apples comparison. With broadcast it’s a handful of networks, and with cable it’s everything else. If you look at the just the top 10 ad-supported cable networks, the live-plus-same-day audience is down about the same amount, about 8 percent compared to 8 or 8.5 percent for broadcast. The other piece of the equation is VOD. Video on demand has been accounted for in time-shifted viewing as long as the commercial load was identical. So as long as the broadcasters ran the exact same commercial load it would be included. But historically they have not done that. The assumption was people wouldn’t stand for it. It wasn’t until about two years ago when I was at Turner looking at C3 numbers, they looked better than they should have. What we found was people were actually starting to find the stuff on VOD, and when they can’t fast forward commercials it made C3 better. The way we found it is we found all this viewing happening that was attributed to time shifting viewing in non-DVR homes, so by definition that was by VOD. VOD is becoming a very important part of how people are shifting viewing habits. In many cases they prefer it because they don’t have to remember to set the DVR. And that counts in the time-shifted viewing bucket. So that’s part of why time shifted viewing is growing. What we know from early data Nielsen is collecting is between 3 and 5 percent of time shifting is coming from VOD in the first three days, and about 10 to 15 percent in the first seven days. So that means more is coming from that four to seven days, which is not what we see in the regular time-shifting trends. If VOD becomes a bigger piece of time shifting, which we believe it will, then we may see more of a balance of the time-shifted audience happening in days one through three versus four through seven, which will bolster the network argument that we should go to C7. Is time shifting impacting broadcast and cable equally? No, it’s not, because they’re not equal animals. A lot of the programming that does well on cable is sports, and most sports is watched live. Other big cable programming is news, and that’s also watched primarily live. Where there is more scripted programming that you get on the big networks, then you get more comparable numbers. So overall it’s happening about half as much as it is on broadcast, but when you look at the top 10 networks, it’s about the same. Obviously the DVR has been around for a while. Why are we seeing such marked time-shifting gains this season? Part of it is VOD. But the other thing that is going to change the game is that come next primetime season, we’ll have a new universe estimate. Part of the reason we’ve seen the decline in broadcast is because it’s not just movement to time shifting or VOD, but there is more viewing happening on tablets and on broadband and other devices that just aren’t being measured. So I don’t believe the decline we see is real in terms of what audiences are actually doing. So that’s another factor to why it looks as though TV broadcast and the top 10 cable networks are declining–it could be going into other device viewing. The universe estimate will eventually increase to include homes that have other devices that play video content. But if a home is only watching TV on their tablet or their computer but don’t have a traditional TV or monitor used as just a TV, that won’t be counted. But at least we’re moving toward a definition that can accommodate those extra viewers. What is broadcast doing to adjust and account for increased DVR usage? The best thing that they’re doing is putting more of their content in VOD and disabling fast forwarding. The next best is getting it out on other devices. The reason I prioritize that is VOD will be measured and the other stuff isn’t as of right now. That’s the best thing they can do. I know they’re trying different stunts. Speaking of that, Fox ran a campaign for “The Following” that encouraged people to set their DVRs to record the show. Do you think we’ll see more of that “DVR first” mindset in promotions by the networks? It’s curious to me. If I were a network I would be pushing people to VOD more than I would push them to DVRs, because we know there we can control the fast forwarding. From a programming perspective, if the programming side is talking to the sales side, and many times they’re not–it’s the sales people that have to end up dealing with what’s lost in the screen-shifted mode, as we like to say these days. The network heads are making a push to move from C3 to C7 ratings as currency for ad buys. When, if ever, do you think that will become a reality? I think it can become a reality now. It’s going to depend on the right advertisers and marketers and network partners to come to that agreement. It will make sense for some, but not for others. But if you’re trying to capture the biggest audience you can, I think it makes sense. It wouldn’t surprise me if there were some C7 deals done a the upfront this year. Maybe it would happen quietly, but it wouldn’t surprise me if some marketers move in that direction. It’s hard to tell though. But it’s really not a big leap for a marketer to go there.