The Numbers Don't Lie: TV Program Loyalty Has Changed

by Dave Morgan, May 28, 2009, 11:45 AM

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Television viewing is growing, but it's also certainly changing. Earlier this week, Nielsen reported that 285 million Americans watched TV in the first quarter of this year, for an average of 153 hours a month, up 1.2%  from last year. So, in spite of increased competition from the Internet and mobile and gaming, television usage continues to grow. However, as I've learned recently, the way people watch television has certainly changed. Old notions of loyalty no longer seem to apply.

For the past three months in my new start-up, Simulmedia, we have had a team of data analysts, behavioral biologists, and statisticians using TNS Media Research's InfoSys TV system to analyze anonymous, aggregated set-top-box data records representing recent viewing histories of approximately 350,000 households in the Los Angeles market to better understand how people watch television. The insights we've been able to glean already have been pretty extraordinary, but one really stands out: Television viewers watch significantly fewer episodes of each program that we had anticipated. Program loyalty is the exception, not the rule.

We selected a number of top shows from broadcast and cable networks and calculated a "loyalty score" for each program. Surprisingly, we discovered that a relatively small number of folks who watched a particular show this season, watched two or more episodes. The show with the highest loyalty score -- "American Idol," unsurprisingly --  garnered a loyalty of only 65%. Thus, only 65% of the folks in our sample who watched "American Idol" this season watched it more than once. "Lost" came in at 52%, "Gossip Girl" at 50%, and "Mad Men" at 33%. On average, only 46% of folks who watched a particular program in our sample watched two or more episodes.

Maybe this isn't news to many of you, but we were surprised. Why does this seem to contradict conventional wisdom, largely based on panel- and sample-based research? Probably because panels can project, for example, that a particular episode had an audience of 10 million viewers, with 75% of those viewers from a particular demographic group -- but they can't tell you that two-thirds of those folks are different from those who watched the show the week before.

Of course, the elephant in the room is the DVR (digital video recorder). The set-top-box data we analyzed did not include DVR viewing. However, since neither Nielsen nor advertisers value that viewing very much -- given DVR ad-skipping -- the linear viewing reality that program loyalty is the exception, not the norm is also part of the economic reality of television today.

What does this mean for television companies and advertisers? I think it's now incumbent on players in this market to dig into viewer data. Anonymous set-top-box data and analysis is now available from a number of sources and firms. There is no longer an excuse not to know what TV viewers really do. Now is the time to find out, and adjust business practices according to reality, not just history. What do you think?

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0 comments on "The Numbers Don't Lie: TV Program Loyalty Has Changed".

1. Monica Bower from TERiX Computer Service
   

   commented on: May 28, 2009 at 12:43 p.m.

   Fascinating. I know there are a few people at work who are fans of show X or show Y who discuss every episode the day after it runs, but it now occurs to me that there are only a few. Personally the only show I watch a LOT is Mythbusters and the Misadventures of Flapjack but it would be a HUGE mistake to think I actually schedule my life around it; in fact I watch it because it is most often what's on when I'm at the TV.

   Having hundreds of channels to choose from, and lives that are busier than ever, means that content is clearly not being consumed the way the show developers assume it is. Both Lost and American Idol are not as interesting or engaging if I have not been watching all season.

   I can turn on ESPN anytime and there's something interesting to watch for an hour that does not require that I have been watching every week for it to make sense. Network TV in prime time is pretty much exactly the opposite. But its funny, I am a regular watcher of Lost and the fact that every fourth episode is a recap drives me nuts. I was thinking 'if they haven't watched yet, they're not going to start on the season finale.' Now I see the wisdom in this - those arent meant for people who never watch, they're meant for the people who only watch half the shows during the regular season, just to fill in the gaps.

2. Grant Braswell from Mediasmith
   

   commented on: May 28, 2009 at 12:47 p.m.

   It seems to me that saving the DVR bomb for the end of the article was a way to keep the tension artificially heightened throughout the article. I was stunned by your original numbers that you were throwing out. 46% of people watched more than one of any given show? I never would have thought that. But to not include DVR watching in the statistics? You might as well have written an article about Mascara use in the general population and not controlled for gender. According to Nielsen, 30.6% of households have a DVR as of March 2009.

   DVR is an enabler of TV program loyalty, and an indicator of an active TV consumer. You set up the DVR to record a specific show you care about - New episodes, old, save as many at a time as you please etc. And not just one show, all the shows you are loyal to.

   I assume then that this information does not include any of the other screens that people watch programs on, be it mobile or online. In those situations, you are working with people that are actively searching out a show on ABC.com, or searching for a torrent and so forth.

   The article starts by saying that more Americans are watching more TV. Well, the population is rising, and there are more screens per capita than ever before. In 2003, there were 74 TVs per 100 people in the united states (CIA World Factbook 2003). Energy Star Research put that number closer to 95/100 people by 2006 for households only. I can't find stats for 2009,but I would be confident there are as man screens as there are people, not even including mobile and online. So everywhere you look there is a screen, and there is a growing population. 1.6% increase now looks marginal.

   Without including DVR, 2nd and 3rd screen, you are missing the most loyal consumers, as well as an increased amount of time watching TV/Programming.

3. Grant Braswell from Mediasmith
   

   commented on: May 28, 2009 at 12:51 p.m.

   Just a quick followup - discussing change in TV loyalty or change in any statistic can be strengthened by showing trend data. However, you can probably say confidently loyalty used to be higher in pre-cable times when there were a few channels and a handful of shows.

4. Michael Senno from New York University
   

   commented on: May 28, 2009 at 2:45 p.m.

   I think overlooking DVR data makes the statistic and conclusion biased. I don't have the data to substantiate this, but I feel a few of the shows draw a strong base of habitual viewers (Idol, Lost, 24, etc). While DVR-viewing may yield ad-skipping, marketers should be considering more integrated approaches for their brands anyway, such as product placement and promotions tied to the shows, which would make DVR viewing numbers pertinent.

   However, this revelation about lack of loyalty, not a surprising stat, brings to light the need for targeted advertising and unlocking some of the power in the STB's. Audiences are more fragmented, but content still draws homogenous demographics. Marketers just need to look in more places to find them.

5. Paul Marcum from GenMouse, Inc
   

   commented on: May 28, 2009 at 3:46 p.m.

   Echoing Grant's comments above, I think the headline should be changed to "Live TV Sees Reduced Loyalty - Must Be DVRs...". Sure, it's an interesting data point that so few people consistently watch Idol live, but is it really all that surprising? Heck, I even timeshift the Today Show so that when I come back a bit late from the gym I don't miss the first 20 minutes (the only portion of the show that matters to me). While the point about the reduced value of the DVR inventory is appropriately made it leaves unanswered the question of how compensate for it - Idol is already trying to compensate for that "lost" 35% with aggressive brand integration, that's really where the opportunity for exploration is here.
   

6. Dave Morgan from Simulmedia
   

   commented on: May 28, 2009 at 11:15 p.m.

   I believe that loaylty to live viewing is an important and critical way to look at television viewing. It best measures that commercial value of audience, since so many folks that time-shift skip the commercials. What is critical - and must be considered - is the fact that there is an enormous discrepancy between live viewing loyalty of broadcast network viewers and cable network viewers. That will be the topic of my next column.

7. Mark Crames from Demeter F.L., Inc
   

   commented on: May 29, 2009 at 7:23 a.m.

   I can only speak for one household, but we watch a number of shows regularly, but outside of sports, 90% of that is on DVR. I can rarely recall when I last watched a produced show live

8. Lynne Tierney from Nightly Business Report
   

   commented on: May 29, 2009 at 10:33 a.m.

   Without including DVR (and Hulu for that matter) you cannot draw any conclusions about program loyalty. The data really only tells you that advertisers on "top shows" should expect their ads to be seen at most twice on live TV....and possibly fast-forwarded on other devices. So they had better make their creative compelling so that viewers choose to watch the ads!

9. Carl LaFong
   

   commented on: May 29, 2009 at 11:29 a.m.

   This ain't really news.

   At the dawn of the people meter era (the late 80s/early 90s), Nielsen did several studies that showed (long story short) no one watched four episodes of a prime time program in a given month, and not many watched even three (and this included the then-appointment-viewing/serialized drama "L.A. Law").

   It's not surprising that this hasn't changed given increasing dispersion of the TV audience since then.

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