The television industry may be talking in different ratings languages in the coming weeks, say TV executives, when Nielsen begins to include programs recorded on digital video recording devices (DVRs) in the viewing it tracks for networks and advertisers.
Beginning Dec. 26, the ratings company will report three separate data streams: 1) “live,” viewing excluding any DVR playback; 2) “live plus same day,” live viewers and those who played back programs on a DVR within one day of their initial airing; and 3) “live plus seven,” live viewers and those who played back programs on a DVR within a week of their initial airing.
Says Sara Erichson, general manager of national services for Nielsen Media Research, “With regard to the different flavors of data, it was pretty clear that different clients had different needs and different priorities.”
Changes in Nielsen ratings, the basis upon which networks and advertisers negotiate the value of ads, threaten to drastically alter how advertising deals are structured. Many ad buyers, not surprisingly, don’t like the new streams and say they won’t include DVR viewers in deals they make during next spring’s upfront; more viewers mean more money that advertisers could be asked to shell out.
Viewers often use DVRs because the devices allow them to skip through ads, and buyers don’t want to pay for viewers who aren’t going to watch their spots. DVR viewers skip through as much as 90% of ads, according to research from Magna Global USA, Interpublic’s media-buying unit.
In making these changes, Nielsen is responding to a long-voiced industry desire for more-accurate measurement of how many people are watching TV. DVRs have been around for almost a decade, and networks and advertisers still do not take into account viewers who record programs on the devices. Only about 7% of U.S. TV homes have DVRs now, according to Nielsen. But that percentage could jump to 37% by 2010, according to Forrester research.
The broadcast networks have united in favor of the new rating streams. Preliminary Nielsen research shows that network programming as a whole registers 4% more viewers when DVR users, who are proven to watch more television than non-users, are factored in. That means more viewers for the networks to tout when they ask media-buying agencies for more money for advertising.
“What we are seeing is that DVRs are going to increase viewership to major network programming and commercial exposure in those programs,” says David Poltrack, executive VP, research and planning, CBS Television & UPN.
Nielsen has been incorporating programs recorded on VCRs into its “live” sample for years, says Steve Sternberg, Magna executive VP/director of audience analysis. That includes all VCR-recorded shows, he adds, not necessarily those that have been viewed. Until Nielsen removes VCR-recorded programs from its live sample, Magna does not want to include DVR-viewed programs in the sample upon which it bases negotiations of upfront ad fees for next year.
Cable networks may not benefit as much as broadcast from incorporation of DVR viewing; they tend to rerun shows multiple times, lessening the likelihood that viewers will record them.
So far, the cable industry has taken a wait-and-see stance toward Nielsen’s changes. The Cable Advertising Bureau recently issued a statement to its members saying that, while “all TV exposures hold value, without enough empirical data to support any one data stream as the platform to value playback, we should not set any market precedent for future commerce.”
Nielsen is allowing its clients to choose which streams to use; the players—broadcast and cable networks, media buyers, individual advertisers—will have to decide which is most advantageous and try to negotiate deals accordingly after they analyze the DVR-inclusive numbers over time.