Commentary

TV Spending Nears $80 Billion, DVR Penetration Chasing 50%

by David Goetzl , April 22, 2013

Wasn’t one supposed to kill the other? Annual TV ad spending is closing in on the $80 million mark, while DVRs could soon be in 50% of U.S. homes by the start of the new TV season.

In an annual report, Nielsen estimates 46% of homes have a DVR, marking a 9% increase over the prior TV season. Meanwhile, the research firm says the U.S. TV market generated $76.5 million in spending in 2012, a 6.5% increase.

Without spending attached to an Olympics or federal elections, the growth rate likely won’t be as robust this year, but a less than 5% increase would still propel the total market beyond $80 billion.

Reality TV continues to deserve some credit. Last year, nearly 40% of all ad dollars were spent in prime time. While drama programming drew the most of any genre at $7.8 billion, the $5.6 billion spent in reality TV dwarfed the $2.7 billion for comedies.

Delving deeper into the DVR-verse, Nielsen data indicates -- not surprisingly -- that the larger the household income, the more likely it is to have a DVR. Nearly 70% of homes with incomes $100,000 or more have a DVR, while 60% have one in the $75,000-$100,000 range.

The data shows 25% of homes with incomes of $30,000 or less have one of the devices. But penetration is growing fastest among that group, up nearly 13%.

If last year’s growth rates repeat themselves, about 60% of homes with incomes of $50,000 or more will have a DVR by the time new shows launch in the fall.

Meanwhile, for all the talk about gaming consoles -- Microsoft and Nintendo are marketing them as entertainment hubs -- growth declined in the past year, albeit by only 0.2%. Data shows 45% of homes have one.

Among the five income segments Nielsen identified, the group making less than $30,000 a year watches the most prime-time TV -- one hour and 23 minutes a night on average. Those with household incomes of $100,000 or more watch barely over an hour.

Time-shifted viewing is growing in all income segments. The daily average rose from 21 minutes to 25 among the $30,000-$50,000 income segment -- the most for any group.

research, television

3 comments about "TV Spending Nears $80 Billion, DVR Penetration Chasing 50% ".

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Douglas Ferguson from College of Charleston, April 22, 2013 at 5:31 p.m.
So the homes with the least discretionary income are seeing the most commercials. What could be better?
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Edmund Singleton from Winstion Communications, April 23, 2013 at 3:27 a.m.

I remember how the recording industry shot itself in the foot when it started to change. Now the television industry is not learning anything from that event and how to embrace change and go with the flow as Aereo becomes the next big thing...

Michael Greeson from TDG, April 23, 2013 at 9:59 a.m.

Nielsen's data regarding increased diffusion of DVRs among the general population is true. But among those households with a broadband connection, such growth appears to have stalled. Why? My hypothesis is that, as broadband and net-connected video platforms diffuse more widely, the need for a DVR diminishes. The functionality ends up in the cloud, meaning I don't need a dedicated piece of hardware to enjoy the benefits of a DVR. The subject requires more research, but recent data did force me to ask whether this is the beginning of a trend or just a blip.