DVRs Increase Ratings and Change Advertising Models

These days it’s as common to watch shows at your own leisure as it is to watch them in real-time.

 

Thanks to digital video recorders (DVRs), television fans can catch their favorite shows at any time. This practice is changing the way that networks gauge viewer interest, and it’s poised to change the way that advertisers are billed for screen time.

 

Before the digital recorder age, it was relatively easy to tell how many people were watching a show. Nielsen ratings gave a snapshot of typical viewer response to a show and viewing figures could be analyzed the next day. However, because of DVRs, networks factor ratings a full week after the show’s initial airing.

 

This change is causing networks to keep shows around that would traditionally have been cancelled due to poor live viewing numbers. For example, Fox’s “Fringe” has only a 1.7 rating (2.24 million watchers) during the Friday broadcast, but those numbers jump to 2.5 and 3.3 million viewers when the seven-day ratings are taken into account.

 

This could prompt changes in the way that advertisers pay for space on network television shows. Currently, advertisers only pay for how many viewers watch shows within the first three days of airing (called “commercial plus 3”). The commercial plus 3 model was a compromise between networks and advertisers, and now there’s a growing movement to expect more from advertisers.

 

Now that the penetration growth for DVR usage has slowed down (up only 2% from last year), networks feel confident that the seven day viewing model is going to be stable and should be used for advertising going forward.