DVR Ad Skipping to Hit 18% in Two Years

The total number of ads being skipped using digital video recorders (DVRs) is currently only about 6%, but that number will rise to between 16% and 18% in two years, according to a report from consulting firm DVR Research Institute, writes MediaBuyerPlanner.

Morevoer, the number of households with DVRs now stands at about a third of total TV households, but that number is expected to rise to 50% in 2011, the report said.

A refusal by the US Supreme Court to hear a case about DVR technology earlier this week potentially paves the way for wider DVR adoption, MediaBuyerPlanner reported.

A large majority of marketers (83%) believe the increased adoption of DVRs will reduce the impact of TV ads in coming years, while 77% of agency executives believe DVR use will be the greatest challenge the current ad model faces, according to the report. By 2012, as many as one-third of ads will be skipped in prime-time drama series, which will be hit the hardest in terms of ad skipping.

In contrast to the DVR Research Institute report, however, The Leichtman Research Group believes that a greater percentage of people will continue watching live TV for longer, and DVR penetration won’t reach 50% until early 2012.

Idol, Lost, Grey’s Anatomy Most Time-Shifted

According to MediaBuyerPlanner, Horizon Media indicates, in its 2009-10 upfront report, that ABC’s Lost and Grey’s Anatomy were two of the most time-shifted programs, following Fox’s American Idol. The ABC shows drew 3.3 million DVR viewers per week. Fox’s House also pulled 3.3 million time-shifted viewers, and 24 pulled nearly as many.

The increase in DVR usage and the ad skipping that goes along with it will have a negative effect on television CPMs, the DVR Institute predicts. This year’s upfront could be the last year that broadcast nets see price increases, says Tom Schultz, managing director at the firm. “You will see that CPMs will start to come down. They are on an upward slope now, but that will change,” he is quoted as saying.

Comments

[fishluvrain:]

DVR technology will certainly change the video advertising format. It is possible this would cause a deterioration in production revenue. Advertisers would be forced to insist on advertisements embedded in the content of the video and/or an advertising bar on the video. Either or both would encourage sponsorship to continue. DVR users would then lose the capability of escaping the advertisements but still be able to store video for later viewing

Jul 06 09:56 PM

[paul:]

I predict the end of free TV is coming. When advertisers learn that many of us mute the advertising audio during live programs and fast forward through commercials when using the dvr, the advertisers will refuse to pay large amounts to sponsor programs. It would also help their cause if so many of the commercials weren't so stupid that they insult your intelligence. But, I guess that is the audience they are seeking, people that don't think for themselves and are easily influenced.

Jul 08 05:48 PM