• by Paul Gough , June 2, 2003

It's the first look at in-depth data from one of the most controversial TV technologies, but analysts say TiVo's new measurement service is above all a look into the future.

The DVR company announced Monday that it would begin providing information on the viewing patterns of TiVo subscribers on a second-by-second basis. It will offer for sale a quarterly report developed by TiVo and Starcom MediaVest Group that looks at audience behavior during primetime on five broadcast networks. And unlike Nielsen, which provides representative samples in half-hour or hourlong blocks, TiVo's capabilities provides the opportunity to see viewers are doing minute by minute.

"You'll actually be able to see not only what they do within the half hour, but do they skip commercials, do they rewind and repeat commercials, do they pause, do they zip through credits. This really is for the first time on a sizeable scale that you'll be able to study how people truly watch television in a PVR environment," said Larry Gerbrandt, chief content officer and senior analyst at Kagan World Media.

And the results, long-rumored, may not be pretty, depending on how you look at things. Starcom found, among other things, that 77% of TiVo viewers who had recorded a primetime program for later viewing skipped the commercials when watching it. Only 17% of those who were watching live or, thanks to buffering that can delay viewing for up to 30 minutes, near-live, skipped commercials. But more than 60% of the TiVo use was for recording programs for later playback.

"Watercooler" or audience-participation shows like The Bachelor or American Idol tended to have more live or near-live audiences and less commercial-skipping, according to the study of TiVo users. But general dramas and sitcoms - particularly the CSIs, ERs, Friends and Will & Graces - are being recorded more often and watched later and the commercials are getting skipped more often. The irony is that the "Must-See TV" shows that are appointment viewing and generate the highest CPMs are also the shows that are most susceptible to commercial-skipping.

Richard Fielding, VP of research at Starcom, said it's not the end of the world as we know it for the television or advertising industries. Penetration is still low but predictions are that PVRs could gain a foothold of between 20%-25% of TV households within three years. Unlike Nielsen's data, TiVo and Starcom don't claim that it's a representative sample. "Is that actually going to change how people buy media today? No, it isn't," Fielding said. But depending on how fast DVRs penetrate into U.S. TV households, it's a glimpse into how viewers will act once they get them. "What our study does clarify overwhelmingly is that when you give viewers the ability to skip commercials, that they're going to do so and they're going to do so in rather large numbers," he said.

For planners and buyers, Fielding thinks the initial value will be in the fact that no information like it has been available before. He thinks that it will help with negotiating sometime in the future. When the networks offer certain CPMs for spots that the DVR research shows that viewers are skipping right past, it will help buyers get a better value for their clients.

"It's hopefully less wastage of dollars for the advertisers. What this does it help quantify what people have been throwing around anecdotally," Fielding said.

Fielding and Gerbrandt aren't predicting the death of the 30-second television spot. Fielding thinks there'll always be a place for well-executed television spots but that broadcasters and advertisers will have to keep revisiting how they communicate with their target audience, offering more interactivity and product integration, for instance.

"It may actually lead to smarter commercial strategies," said Gerbrandt. "Because aside from certain kinds of surveys that can be done, there's no way of really knowing whether anyone watches the commercials or pays attention. This gives advertisers a head start in new strategies for the future, where there may be many more PVRs."

The Starcom/TiVo study covered the primetime offerings from NBC, ABC, CBS, Fox and The WB, 70 different primetime shows airing from last October to this February, about 250 individual episodes. It was a lot to sift through and Fielding said there's more work to be done in how people watch television using TiVo, particularly in the areas of childrens' and sports programming.

Gerbrandt said the TiVo data would be instantly useful to program producers and those on the creative side, who will learn how people use the medium and how they interact with content. It might take a little longer for planners and buyers to integrate this information into other data they get already.

"The key is how it gets refined down for the agency buyers and planners who are already confronted with not just buying four networks but 100. This adds two or three orders of magnitude," Gerbrandt said. "It's going to take time for the data to evolve to the point where the media buyers and planners make use of it."