Nielsen Again Puts DVR Viewer Ratings On Pause

For the second time in as many years, Nielsen has delayed the start date for measuring TV viewing that occurs through digital video recorders like TiVo or other proprietary DVR services offered by satellite and cable operators. The latest postponement wasn't simply a unilateral decision on the part of the rating service—it came after intense pressure from the TV networks. And after months of contentious meetings on the subject over how best to design a system for measuring both recording and playback of DVR viewing, Nielsen caved to the networks' demand and agreed to push back the start date by four months to January 2006. The delay angered some researchers in the ad agency community who viewed it as unnecessary."We're disappointed by the delay," said Bruce Goerlich, svp/director of research at Publicis Groupe's Zenith Media. "We think this really is responding to the seller's needs, not our needs." At issue was Nielsen's two-part approach to DVR measurement. Last year, the ratings company outlined a plan under which it would provide a preliminary program rating that reported all real-time, or "live," viewing of programs being recorded by DVRs. A second, and final, rating would incorporate all subsequent playback viewing that occurred within seven days of the recording. The networks argued for, and will now get, a three-pronged methodology that will also include a preliminary rating incorporating real-time viewing plus any playback that occurs the same day the program is recorded."We have to have same-day playback," said David Poltrack, evp, research and planning, at Viacom's CBS. "If a movie studio advertises on Thursday night, there is a huge difference in value between the viewer watching that night either live or in playback and seeing it the following Sunday. We need that data to appropriately assess sales value."Goerlich doesn't quite see it that way and questions why Nielsen couldn't proceed on schedule and add the desired same-day playback component when it will be ready next January. "The industry needs Nielsen to supply whatever DVR viewing data it can as soon as possible," he said. "We want to be able to see the information. If the sellers want to provide that kind of information, that's fine, but why stop the whole process when we don't have any stream of information now? I'm a believer in 'don't let the perfect be the enemy of the good.'"Barbara Nathan, svp/director of media research at IPG's Universal McCann, agreed. With the latest delay, she said, "Nielsen is kowtowing to what the networks want." And Nathan, like Goerlich, argued that the same-day playback rating may provide less, not more, clarity about TV viewing habits. "I want to know who is watching my commercial, and chances are if somebody started into a program late, they're skipping through the commercials. I need to know that," Nathan said.Adds Goerlich: "When you're merging live viewing with fast-forward viewing, there could be an artificial inflation of the commercial exposure because people skip through the commercials by as much as 50 to 75 percent during playback."Nielsen, which is owned by Adweek parent VNU, was unavailable for comment.Though it has become an almost generic term for recording a TV program with a DVR, TiVo is struggling to gain market penetration since it requires an additional piece of hardware in the home that many consumers find intrusive or too complicated. By contrast, satellite and cable companies offer similar services without the extra equipment. Instead, the set-top box providing the cable or satellite feed is simply programmed to provide the service. DVRs are now estimated to be in 7 million households, or about 6 percent of U.S. homes, according to Forrester Research. That's in line with Nielsen's own unofficial estimate.And viewers in DVR homes tend to watch more TV than average, researchers say. So by not measuring such households, Nielsen's ratings under-report the amount of viewing that really occurs. According to Josh Bernoff, Forrester's top analyst in the media and marketing sector, Nielsen is probably under-reporting actual viewing by about 3 percent. That's the good news. The bad news for advertisers is that there is a 54 percent reduction in the amount of TV commercials that are viewed in DVR homes, according to the latest surveys conducted by Forrester, Bernoff said. "That's because they watch about 60 percent of the programs recorded and they skip about 92 percent of the commercials in the recorded programs," he said.Those numbers are pretty alarming, and explain why the industry wants Nielsen to quickly get its act together on the DVR measurement front. Researchers at the TV networks and ad agencies say they aren't in a panic about the numbers reported by Forrester—at least not yet. For one thing, they argue that today's DVR usage data is based on the behavior by so-called early adopters and probably isn't an accurate indication of how the masses will use the DVR, noted Alan Wurtzel, president of research and new media development at NBC. "Mainstream consumers are going to be much less fanatical in their usage," he said.Wurtzel points to studies showing that people will watch commercials in DVR playback mode. "As it rolls out, it will change people's behavior, but it's not going to kill the advertising business overnight," he added.Bernoff isn't so sure. "The marketers I talk to are very concerned and don't have an easy way to calibrate it," said Bernoff. He argues that the early-adopter stage is basically over and projects that DVRs will reach 11 percent penetration by the end of this year, 26 percent two years from now and half the country by 2009. "It's rapidly becoming a mainstream phenomenon." Indeed, some markets, including San Antonio and Austin, Texas, and Rochester, N.Y., all serviced by Time Warner Cable, have DVR penetration exceeding 20 percent already, according to a company rep. Statistics like those, researchers say, demonstrate how critical it is that Nielsen get in the DVR measurement game fast. That's because Nielsen is the only company in a position to provide detailed data on how individual viewers use the DVR—data from TiVo and cable and satellite companies report household usage data only. "There are ways to deal with it," said Nathan, referring to commercial avoidance by DVR users. "We can respond creatively or buy differently. But in order to do that we need to be able to quantify usage with Nielsen because that is the currency data."

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Nielsen Again Puts DVR Viewer Ratings On Pause

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