• by David Goetzl  @dgoetzl, June 28, 2007

Come this fall, the first break in every primetime show on Telemundo will be limited to 60 seconds. The Spanish-language network is a small player, but it’s “Power Pod” is a reaction to a groundbreaking shift in the buying and selling of TV time that is becoming the dominant issue for all networks in this upfront.

For decades, broadcasters and advertisers used program ratings as the currency to determine prices. So, all 60 minutes of an “ER” would yield a rating. But now, Nielsen is publishing commercial ratings, with figures for just the ad breaks.

Advertisers are reacting with hallelujahs. They only want to pay for people who stay tuned for the commercials and are pushing to base upfront deals based on the new numbers.

Networks are less thrilled, though resigned to a future where commercial ratings inevitably will be the currency. So, begrudgingly, they appear willing to negotiate with commercial ratings (at least the broadcasters are; cable networks are less eager, due to issues with the accuracy of the data).

But, they’re asking for something in return: Payment for viewing of shows with DVRs. In last year’s upfront, buyers refused to pay for anything but “live” viewing, figuring that DVRs lead to mass commercial skipping.

DVRs are in 17 percent of U.S. homes now and will continue to proliferate. And already, over 25 percent of 18- to 49-year-old viewers who watch an episode of NBC’s “The Office” do it in delayed fashion. Networks are determined to get paid for the added viewing.

Buyers and sellers seem to be moving to a middle ground, making deals based on commercial ratings for viewing that occurs in the “live” broadcast and during the ensuing three days. Networks believe that “live plus three” better reflects a program’s popularity. (Nielsen data shows 95 percent of primetime shows are watched within that period.) And advertisers feel somewhat protected from ad-skipping, since commercial ratings don’t include fast-forwarded ads. 

Now all broadcasters are experimenting with tactics like Telemundo’s shorter pods. With a commercial ratings currency, the more networks can keep viewers tuned in during the ads, the more money they stand to make.