Lauren Wolf April 9, 2007 CM330 – Helena Medina The Effects of DVR on the Way Television is Watched When

television was first invented, it was a “live medium”, broadcast directly from its place of production into people’s homes, never to be seen again. By the 1950’s television shows had the ability to be pre-recorded, but still were only broadcast at a certain time. Families gathered around the television together to watch their favorite show at the same time every week. The advent of the VCR enabled people to record their favorite shows if they were not able to watch them live or wished to watch them a second time. The VCR was a convenience, but did not radically change the way television was watched. This phenomenal change was brought out by the introduction of the DVR, digital recording device. The DVR has given viewers the ability to watch exactly what they want when they want, and the ability to skip commercials is an enormous problem for advertisers. The digital recording device is a system that allows a television viewer the ability to pause live television, and to specify which shows to record, with advanced options such as the ability to record every episode of a certain show. DVR was first introduced in the United States in 1999, through two brands, Replay TV and TiVo. Although Replay TV was considered better by experts, TiVo became a lot more successful. TiVo basically had a monopoly on the industry until 2003, when many cable and satellite companies began to offer boxes with built-in DVR. These DVR systems offered more features, such as being able to record two shows at the same time, cost less, and were easier to use, and the menu was built into their regular cable menu. For these reasons, the number of

households has recently increased, rising from 8.6% in 2005 to 11.2% in 2006 (Kelly & Ellwanger). When someone watches television through a DVR, they are not watching television through its natural flow, which does not only include the specific program, but also commercials, and the show before and after the show they are watching. Scheduling is a huge part of television, as the timeslot of a program can significantly impact the audience it receives. For example, tent poling places new shows both before and after a popular show, and hammocking places a new show in between two popular shows. Television stations rely on these techniques to draw in an audience, with the assumption that viewers will tune into the station before their intended program starts, and stay tuned when it is over. The DVR completely undermines this technique, as only the intended program is recorded. Although the number of households with DVR is still relatively low, advertisers are concerned, as these households are their target consumers. 17.1% of DVR owners earn over $150,000 compared to 8.2% of the general population. Owners are more likely to be college educated, and read newspapers and magazines regularly, but are 23% less likely than the general population to be heavy TV watchers (Kelly & Ellwanger). Thus, although those with money are more likely to skip commercials, the majority of TV watchers still do not have the means to do so. Many people have a misconception as to how commercials are skipped. While watching live television, it is impossible to bypass advertising. Thus, in order to avoid commercials, one must “time shift” – record a program and watch it at a more convenient time. A common practice is to start watching an hour long television show about twenty

minutes after it begins, as to avoid commercials but eventually catching up to live television at the end of the hour. More and more people are beginning to engage in this practice. For example, the live-rating for Grey’s Anatomy is 7.2, whereas the live-plusseven-day rating is 18.2. Thus, more people are time shifting the program than are actually watching it live (Poltrack). However, the commercials are not magically skipped, and the viewer can make out some parts while fast forwarding. Television Week explains the techniques that advertisers are using to still get their message across. To grab the attention of time shifters, commercials should avoid hard selling, use simple, clean graphics, and display the company’s logo and website for at least four seconds. Advertisers complain that the DVR is ruining the industry, but the latest Nielsen’s commercial ratings took into account only those commercials that were watched live (Poltrack). Thus, advertisers are not paying to target DVR uses, but their message is still being sent to them. Nielsen is in the process of a system that will release commercial ratings data for live TV, live plus one day of DVR use, live plus two days of DVR use, and live plus three days of DVR use. It is estimated that eighty percent of delayed television watching occurs in the first three days (Lafayette). This new rating system will pertain more to those measuring who watches the actual television program, rather than who watches the commercials. In order to make sure that their advertisements are seen, advertisers can place their ads during programs that are usually watched live, such as news, sports, or weather (Neff). Because these genres are so time-sensitive, they become irrelevant when time shifted, and therefore even regular time-shifters are likely to watch these live. DVR is having a huge impact on daytime TV, as programs in this category are the most time

shifted (Neff). Companies with smaller advertising budgets depend on daytime advertising, as it is much cheaper to show a commercial during the day. However, because these commercials are rarely even watched, media planners are shifting advertising money elsewhere. In contrast, some researchers believe that skipping commercials has in fact hurt advertisers. A study showed that consumption of an unnamed packaged-goods brand was 12% lower in homes with DVR than homes without. However, consumption of two other goods was only 5% and 1% lower (Neff). Thus, one cannot determine whether the difference was due to the presence of the DVR or to other factors. The study did strongly support the fact that consumption of new products as a lot lower in households with DVR, as new products depend on advertising to gain exposure (Neff). Often, people do not realize that they are affected by advertising, but they are more likely to pick up an item from the shelf if they have heard about it before. Although the DVR has been popular in the United States for almost ten years now, it is still in the experimental phase in most of Europe. European governments are in the process of deciding which system will be standard for all DVR manufacturers. Due to pressure from private channels, it is currently illegal to manufacture devices that allow viewers to skip commercials Private channels depend on advertising revenue in order to function, and are afraid that devices that allow commercials to be bypassed with ruin their industry (Medina). Like European private channels, American private channels also depend on advertising in order to function, and it is unclear as to why Europeans believe that the DVR will affect them more than it has affected the American television industry.

Although most Europeans are not even aware that the DVR exists, Britain is the exception. Sky, Britain’s main pay-television provider, has introduced SkyPlus, a package that includes DVR. Introduced in 2001, the price of the system has dropped from 399 pounds to 99 pounds, and currently twenty percent of Sky subscribers also subscribe to SkyPlus Interestingly, there is a huge difference between DVR users in the United States and DVR users in Britain. Unlike in the United States where those who own DVR systems are not the heaviest television watchers, SkyPlus subscribers watch more television than basic Sky subscribers – 2 hours and 26 minutes daily compared to 2 hours and 7 minutes (Pfanner). A reason for this cultural difference could be due to people’s attitudes towards technology. In the United States, many people purchase the best technology that they can afford. Possession of the most recent technology is a status symbol, and if one can afford DVR, he/she probably does not consider how often it will be used before purchasing it. In Britain, however, those who purchase DVR systems are most likely people who feel like they will benefit from it the most. In conclusion, the DVR is dramatically changing the world of television. Although the DVR has made television watching much more convenient for viewers, it has caused complications for schedulers and advertisers. Adaptations have started to be made in order to target audiences in a new way, and as DVR technology becomes even more popular, more adaptations will be necessary. Currently, live television viewing still remains high, and there is time for advertisers to come up with new ways to hold a viewers attention, such as variations of product placement and guerilla marketing.

Works Cited Kelly, Anne M., and Steve Ellwanger. Adults with Digital Video Recorders Upscale and Print-Oriented. New York: MRI, 2006. 14 Apr. 2007 <http://www.mediamark.com/MRI/docs/press/pr_07-26-06_DVRs.htm>. Lafayette, Jon. "Nielsen Close to Unveiling Ad Tracking Plans." Advertising Age 15 Jan. 2007: 5. Academic Search Premier. EBSCO. University of Illinois, Barcelona. 14 Apr. 2007. Keyword: DVR. Lafayette, Jon. "Nielsen Close to Unveiling Ad Tracking Plans." Advertising Age 15 Jan. 2007: 5. Academic Search Premier. EBSCO. University of Illinois, Barcelona. 14 Apr. 2007. Keyword: DVR. Medina, Helena. E-Mail interview. 10 Apr. 2007. Neff, Jack. "Skip This TiVo Story At Your Peril, Top Marketers." Advertising Age 5 Mar. 2007: 8. Academic Search Premier. EBSCO. University of Illinois, Barcelona. 14 Apr. 2007. Keyword: DVR. Pfanner, Eric. "The British Like to Control TV with Their DVRs, Too." New York Times 8 Jan. 2007, Late ed., sec. C: 4. Academic Search Premier. EBSCO. University of Illinois, Barcelona. 14 Apr. 2007. Keyword: DVR. Poltrack, David F. "Why TV Needs Commercial Ratings--Now." Advertising Age 13 Nov. 2006. Academic Search Premier. EBSCO. University of Illinois, Barcelona. 14 Apr. 2007. Keyword: DVR.

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