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

• by David Goetzl  @dgoetzl, 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.