Commentary

Media Insights Q&A With Steve McGowan

Steve McGowan, SVP Research at Discovery, returned to the network after a seven-year stint at Nielsen. Steve has a unique perspective on the evolution of Discovery from small start-up to large conglomerate. In an in-depth video interview, Steve talks about a range of subjects including the use of set-top-box data, the evolution of DVRs, and some predictions for the next five years.  

Below is a short excerpt from the video interview. Direct links to the full interview can be found here. 

CW: Steve, how do you think DVRs will evolve with viewer usage? Do you think they will reach critical mass?

SMc: It will be interesting to see what happens. There are those DVRs at the head-end so that people who are perhaps intimidated by technology and are possibly more comfortable with video on demand will try them. It will be interesting to see how these types of DVRs will take root.  

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There has been a lot of speculation and legal proceedings that go back and forth. But I don't think there will be much movement on DVR penetration until the MSOs find a way to essentially give those boxes away and make them more affordable.

We are starting to see DVR penetration leveling off. I think that people understand what the capabilities are of the box. They are refining the way they use it -- they have to figure out how to share the hard drive across all the members of their family. And then it can become more of a tool that viewers can use to help figure out what they want to watch. Since the early 1990s [viewers] have been saying that they always want to watch what they want, when they want. And now we are also hearing consumers add "where they want." Some of that behavior is beginning to take hold too.

CW: What type of research did you do on VOD while at Nielsen?

SMc: Video On Demand was something we started to do by using primary research. We would conduct some phone studies and online studies. And before we got the data from the cable operators we starting looking at the file server data.

 It was all attitudinal and usage studies - the reported use of VOD. I juxtaposed that with DVR usage, trying to find out if one of those technologies would surpass the other. What we found was that you had a certain camp who were more loyal to their DVRs and others that had more loyalty to VOD, maybe because it was an easier technology to understand.

Then, as Nielsen was able to improve its measurement and metering technology, we figured out ways that we could track playback of Video On Demand. In particular we worked very closely with HBO. who is one of the major drivers of Video On Demand content because of all the offerings they give to their subscribers. 

CW: Did you see a difference in the demo profile of the DVR user versus the VOD user in the study?

SMc: As we looked at those who had access to either technology, what we tended to find is that the DVR home, not surprisingly, was a bit more upscale. Both of them tended to have digital cable because that is one of the requirements -- you had to have one of those boxes for that tier of service --  but because the incremental cost of the DVR service was anywhere from ten to twenty dollars a month, we found that the DVR homes tended to be more upscale and more technologically oriented (they know how to use the device). Those were the main differences.  

CW: I heard that you have been able to analyze some set-top-box data while at Nielsen. Can you talk about that? 

SMc: Sure. In the early days Nielsen was partnering with Charter to get some of their set-top-box data out of California. What we did was harvest the data from Charter and collect and link the data with the panel home in the Nielsen sample. We were able to see what the Nielsen box said and what the set-top box said. We examine what kind of tuning was going on. It was really interesting and it enabled us to begin to understand some of the shortfalls and some of the opportunities from set-top boxes such as how often do people turn the box off -- and is there really someone sitting in front of the channel? Those were some of the beginnings of the learnings.

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