EARLY NIELSEN DATA SHOWS THAT DVRs HAVE NEGLIGIBLE IMPACT ON COMMERCIAL EFFECTIVENESS
Adverse Effect of Replay Technology on Commercial Average Less than Three Percent
Wurtzel: "The television world isn't changing as dramatically as some have feared."
NEW YORK -- March 16, 2006 -- A recent follow-up to a 2005 study on ad-supported television in the age of Digital Video Recorders (DVRs) concluded that replay devices in the current TV market have an impact on commercial effectiveness on average of less than three percent, a far smaller figure than previously thought. Citing recent data from Nielson Media Research, Alan Wurtzel, President of NBC Universal Television Research and Media Development, spoke today at NBC Universal's annual development meeting and presented evidence showing that currently the impact of commercial skipping in non-DVR households is actually greater than the impact in homes with a DVR.
Looking at an average of the six broadcast networks in primetime, Wurtzel's analysis of Nielsen data found a drop in commercial effectiveness that averages less than three percent. Conversely, Wurtzel cited a nearly seven percent drop in commercial effectiveness when the same analysis was conducted for viewing in non-DVR television homes. Further, Wurtzel showed that for replay technology to have an impact of even 10 percent on commercial effectiveness, DVR penetration in total US households would have to more than triple from today's ten percent to 35 percent - a figure that the market is not expected to reach until 2009-2010.
"It's time we put DVR usage and its impact on advertising in perspective," Wurtzel said. "We're not saying that people who use DVRs don't skip commercials. What we are saying is that we've been living with commercial skipping since day one, and yet television remains the most powerful and effective marketing and sales medium ever known. And right now, the impact on commercial effectiveness is actually greater in non-DVR homes than among viewers who watch television with a DVR."
Wurtzel's presentation follows a study on DVR penetration conducted last fall by research executives from the six major television networks, which showed that DVRs increase household television viewing by 12 percent. Combined with the previous data, this recent research concluded that in spite of new technologies in the home - including video on demand, broadband, and replay devices - traditional television viewing habits have remained very much intact. As an example, Wurtzel cited that of the 100 channels the average US household receives, only 15 are viewed regularly or approximately 16 percent of the total channels available which is a pattern which has remained consistent over the past decade.
Wurtzel concluded his remarks on Thursday with a call for a realistic response to the DVR's impact on ad-supported TV as reflected in the Nielsen data. "Television has constantly evolved as new technology appears," Wurtzel said. "The DVR should not be feared by television and advertising executives. By measuring more real, actual viewing, it is frankly a huge benefit to us all."