Posted on 07/02/2009 7:25:42 AM PDT by abb
When buyers and sellers finally kick off this year’s upfront, several broadcast networks could well see pricing increases over last year, despite the weak economy and network television’s sinking ratings.
But if they do, it's almost certain to be the last year for such gains.
The networks have done a good job of explaining away the impact of DVRs on ratings, noting that in fact few users actually bother skipping through commercials.
But that is about to change, according to one top researcher. As more and more users acquire and begin to use DVRs, ad skipping will become a far larger issue for networks, and those annual cost-per-thousand pricing increases will become a thing of the past.
“You will see that CPMs will start to come down. They are on an upward slope now, but that will change,” says Tom Schultz, managing director at DVR Research Institute, a California-based consulting firm.
About one-third of homes now have DVRs, and the total number of ads skipped is only about 6 percent across DVR and non-DVR households, but Schultz is predicting that in two years the number of DVR households will increase to 50 percent and the percent of ads skipped in all TV households will rise to 20 percent.
Within DVR households, ad-skipping wall become more common. Schultz notes that the longer people have DVRs, the more adept they become at using features such as fast-forwarding through commercials. And as they become adept, they use those feature more often.
“I think this will be very problematic for broadcast primetime,” says Schultz. “The more popular a show is, the more it is time-shifted.”
DVR Research Institute recently released the results of a survey it conducted with ad agency executives about how they’re changing their media buys and commercial executions as viewers increasingly fast-forward through commercials.
Schultz's findings are comparable to those of other research studies.
Magna, the global media buying shop, last November found that 11 percent of network primetime viewing is to time-shifted programs, meaning shows recorded and watched after they originally air.
Of that, roughly two-thirds of recorded commercials are fast-forwarded through, meaning about 8 percent of all commercials are skipped.
Still, there are some hopeful signs the networks won’t be hit quite as hard by commercial skipping as the DVR Research Institute is estimating.
“I have [commercial skipping] going to about 16 percent by the end of 2012,” says Bruce Leichtman, president and principal analyst at Leichtman Research Group. “I have DVR penetration going to about 50 percent by early 2012.”
Moreover, media buyers and sellers are now using as currency Nielsen’s C3 ratings, which are commercial ratings for live viewing and three days of DVR playback. C3 ratings already factor out fast-forwarded commercials.
And it’s widely thought that TV viewers in some cases pay more attention to skipped commercials than live commercials since they’re looking at the TV screen as they fast-forward.
“There is mounting evidence that those who do watch during DVR playback are actually more attentive viewers,” says Steve Sternberg, executive vice president of audience analysis at Magna.
"Network evening newscasts will go dark after the '08 elections and their news divisions disbanded."
Walter Abbott, (b. 1950), Media observer and commentator
ping
I just fast foward
In my home we’ve already started to time-shift our TV watching (what little we do) by a day, for the express purpose of being able to fast-forward through the junk and spend less time in front of the tube. If we want to watch 3 hours of shows in a week and can eliminate 1 hour out of that time, what a huge benefit.
http://www.politico.com/news/stories/0709/24441.html
Washington Post sells access, $25,000+
http://www.guardian.co.uk/commentisfree/2009/jul/01/comment-free-media-revenue-models
Free for all?
http://www.reuters.com/article/internetNews/idUSTRE56061U20090701
Fledgling website hopes to open journalism to all
http://www.thestreet.com/story/10532921/1/murdoch-talks-media.html?cm_ven=GOOGLEN
Murdoch Talks Media
http://www.examiner.com/x-5611-Minneapolis-Tech-Culture-Examiner~y2009m7d2-The-future-of-online-news-twitting-its-way-into-journalism
The future of online news, twitting its way into journalism
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=109054
Smaller Newspapers Feel the Squeeze
http://www.newspaperdeathwatch.com/
Many Views of Journalism’s Future
The answer is to write good commercials. I always watch the commercials for GEICO or Dos Equis, at least the first few times. Heck some of the writing is funnier than the shows they are interrupting. I LOL every time I see one of those “He’s the most interesting man in the world” commercials.
I have retained my standard-def Panasonic hard disk recorder because of its robust time-skipping features and because I wanted to avoid any DVR that phoned home (read: TiVo).
LOL! What the heck? So not hearing the pitch while catching every 20th frame, letting a one minute commercial pass by in 3 sec causes ‘skippers’ to be more attentive to the commercial? As an advertiser, I'd say neither the live or the fast-forward viewer of my commercial was getting my message.
What I do not understand is why this has become such a hot topic only recently.
I, and I’m willing to bet, most American families have had vcrs since the late 1980s. Personally, I haven’t watched a commercial I didn’t want to see in 20 years. Vcrs let you zip through them, albeit not as cleanly as dvd recorders, but still, the technology has been out there for decades.
Of course, now that dvd recorders or dvrs are mainstream, and being digital they have many advantages over the tape-based vcrs, skipping commercials is easier, but it’s not NEW.
Assuming that no one without a DVR skips commercials (i.e. no old school VCR taping or buring DVDs to skip commercials), that means only 18% of ads broadcast to houses with DVRs are skipped. I call BS. Even my friends with DVRs who still watch TV shows "live" will skip the first 20 minutes or so doing chores or watching another show, and then start watching the "live" show and skip the commercials to catch up. It is funny to watch one who mistimed it so at about 10 minutes before the hour he is caught up with the broadcast and is stuck with the last few minutes of unskippable commercials. He'll hit the fast forward button even though he knows it won't work.
My dad, one of the cheapest people I know, asked me recently whether he should pay for a DVR, which means he has decided he's getting one and is really asking my help to pick out the features he needs.
They need to come up with a better and more creative way of getting their message out:
BAD AVERTISING EXAMPLES that I will definitely skip:
Crank up the volume (have you noticed that?) I dive for the remote control
Ten minutes programming, six minutes advertising - Way too much.
Catchy, upbeat, loud music soundtrack - It isn't!
Same damned thing again and again and again - At least GEICO is trying!
Get your attention by annoying you - Only HeadOn beat this one.
Anyone else got some creative advice for the ‘creative advertising trade?’
One very real problem here, even as many enjoy the fall of major media. Quality whether in music, film, TV et.al. requires money. Money for the talent itself, for the production facilities, for the post production efforts. That money comes from sales and advertising.Using the web or DVR technology to eliminate either or both reduces the revenue stream to the point where the cash reward will not be worth the investment of time, talent, and capital. This, at least for now, is still a market driven industry, and its quality will not survive a loss of reward. Musically, the web could reduce music to a million garage bands on a million URLs and no Rolling Stones, Blue Grass Boys, Frank Sinatra, or Patsy Cline ever emerging. Visual entertainment could be reduced to thousands of backyard indie type directors and actors with no Scorseses, or Fords, or Hitchcocks ever emerging. The web and technology have a great many positives. The effects on entertainment are not necessarily among them.
People will watch commercials at full attention when they’re in the market for a type of product. Marketers need to counter new technology with new technology, and stop bothering people with ads 95% of them have no interest in. That’s why people are skipping them in the first place.
I think because it used to be only those actively hostile to ads who skipped before. You had to tape your shows or else buy special equipment to record. Those people wouldn't have been good commercial watchers anyway. Now, it is almost to the point where every cable or satellite box will be a DVR, so everyone can skip instead of just those who utterly hated ads.
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1003990062
MediaNews Group: We’re Not On Brink of Bankruptcy
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1003990234
New ‘Fitz & Jen’ Podcast Up Now: Could New Copyright Laws Help Save Newspapers?
http://www.deadlinehollywooddaily.com/more-bad-news-for-hollywood-trades/
More Bad News For Hollywood Trades...
http://www.politico.com/news/stories/0709/24419.html
Save journalism? Beats us, panel says
http://www.guardian.co.uk/media/2009/jul/01/trinity-mirror-to-close-midlands-papers
Trinity Mirror to close nine Midlands newspapers
http://www.adweek.com/aw/content_display/news/agency/e3ic3a4730761c7eaf67ad23fe5bffe9e94
U.S. Hispanics Flock to Web
Expect significant growth in this sector, eMarketer says
Once I start, I will watch commercials the first time but when these idiots repeat the same commercial 5-10 times during the course of the program I just fast forward.
Some of the commercials are entertaining. Some are informative. Others just are counting on stupid people believing the hype.
You are correct, it is not new. What is new is the degree of use. Compared to a VCR, the DVD is much more user friendly and therefore much more widely used.
As long as there was a small percentage using VCRs, the nets weren't worried. The widespread use of DVRs is an entirely different threat to the 30-second spot.
Never, ever confuse scarcity with quality. That is all we have had since the dawn of electronic information distribution - scarcity. And that because 'they' controlled the distribution systems.
I suggest there will be an increase in quality of entertainment and more accuracy in news reporting simply because there in more of it.
Heck, I remember getting up out of my chair to run over to the tv to turn down the volume knob when a commercial came on. Once tv remote controls appeared (with the mute button!), I was in like flint.
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