Published November 18, 2005
NEW YORK – Even though nine out of 10 people with digital video recorders say they usually fast-forward through commercials, broadcast executives argued Wednesday that doesn't mean the death knell for advertisers.
People with DVRs watch more television, and even if they zip through ads, they notice them, the executives said.
Researchers from ABC, CBS, NBC, Fox, UPN and the WB took the unusual step Wednesday of appearing together to share data about the impact of DVRs on TV-watching habits. An estimated 7 percent of the nation's 110 million homes with television have the time-shifting devices.
Starting Dec. 26, Nielsen Media Research will begin incorporating DVR data into its ratings. That means it won't just measure how many people watch "Desperate Housewives" on a Sunday night, but also how many people record it and watch up to a week later.
Preliminary data shows that homes with DVRs average 12 percent more television viewing than those that don't have them, the researchers said.
The ability to watch without being tied to a schedule can significantly increase the visibility of programs that might not be appointment viewing. For example, people with DVRs are watching the WB shows "Supernatural" and "Smallville" at more than twice the rate of people without the machines.
Yet the industry's chief fear is that people with DVRs will completely tune out commercials.
That's not completely unfounded: a CBS survey found 64 percent of DVR users said they always skipped commercials and another 26 percent said they skipped them most of the time. A separate study by Forrester Group put the "skip" rate at 92 percent.
But Alan Wurtzel, NBC's chief researcher, said it was an "urban myth" that DVRs make commercials worthless.
The networks said their research showed that a majority of people are watching their screens even while darting through the ads, and most of these notice the ads. (Still unanswered is how much these spots are sinking in as they speed by.)
More people are also likely to say they skip ads when they actually don't, they said.
"There is a certain amount of commercial exposure that takes place even in the most difficult environment, when people say they are fast-forwarding through commercials," Wurtzel said.
The industry seems split between two extremes — those who believe DVRs will make traditional advertising worthless and those who think they won't have any effect, said Josh Bernoff, principal analyst for the Forrester Group.
The truth will be somewhere in between, he said.
"It wouldn't surprise me if we actually see (advertising) rates come down," he said. "But this is not the end. Television came in and people still advertised on radio."
The increase in product placement advertising and commercial sponsorship shows how the industry is already preparing for a different landscape, he said.
In the short term, the industry must decide how new data on DVR usage will be used in computing advertising rates, said Sara Erichson, a general manager at Nielsen Media Research. In a little more than a month, Nielsen will report different numbers for people watching a show live and people watching recorded versions.
The broadcast researchers say they believe the data will convince advertisers — some of whom have already cut back on their television spending — of the value of TV commercials.
"We don't like to say the advertisers are wrong," said David Poltrack, CBS and UPN research chief. "But we think they're getting a lot of wrong advice."