• by November 8, 2005

OOPS! WE SUPPOSE THIS IS WHAT THEY INVENTED REWIND BUTTONS FOR -- Well, one thing you can say about MediaPost is that when we get it wrong, we get it really wrong. You know that story MediaDailyNews ran today about Magna Global USA's plan to factor VCR ratings out if its negotiations with the networks? Well, it turns out that's not what Magna plans to do at all. What the company plans to do, according to Executive Vice President-Director Of Audience Analysis Steve Sternberg, is not add DVR ratings on top of existing Nielsen ratings, which already have VCR ratings baked into them. Actually, Sternberg said quite a few other things to us today, most of which we can't print here, lest The Riff be accused of bad taste. What we can print is that Sternberg says we reported "the complete opposite" of what the agency said it planned to do in a white paper released early this morning.

Apparently, we misunderstood what Sternberg meant when he wrote: "Magna Global Will Not Use 'Live + VCR Recording + 7 Days of DVR Playback' data in negotiating with the networks. Why? Well, we know from previous research that roughly one-quarter of what's recorded on VCRs is never played back--and at least three-quarters of played back material involves the use of fast-forwarding over commercials." Sternberg says he meant that in the additive sense, not in the sense that the agency now plans to deduct VCR data from its ratings estimates.

We really don't know how to explain how we got something so wrong, especially after spending the better part of an hour speaking to Sternberg about it on Monday. All we can figure out is that we must be really dense. But that's something readers of this column already know. We suppose the only good news in this is that we'll never misconstrue another Magna report again, mainly because it's now unlikely we'll ever see one in the future.

Since we got the report so wrong and we don't want to risk, in Stenberg's words, "mangling" it any further, we're reprinting the text of it here in its entirety:

November 8, 2005

VCRS HAVE MORE IMPACT THAN DVRS

Nielsen continues to count non-viewers

Mislabels "live" viewing

Why We Say No to "Live + VCR Recording + 7 Days of DVR Playback"

To accommodate DVR homes, which were previously excluded from its sample, Nielsen is about to release three streams of data. But contrary to press headlines, and Nielsen's own press releases, "Live" viewing is not one of them.

VCR Recording Is Still Counted as Viewing

I was on Nielsen's VCR measurement committee about 20 years ago, when the industry debated how to report VCR measurement. Nielsen was including VCR recording in its reported ratings, but promised that within a couple of years it would switch to VCR playback. It was not able to do so, and never removed VCR recording from its reported ratings.

That was when VCR penetration was still under 15% of the U.S. Today, VCRs are in more than 90% of U.S. homes, and VCR recording accounts for about 6% of the average primetime audience (but as much as 10% or more for several programs). In daytime, VCR recording accounts for around 15% of the average soap audience. And Nielsen simply applies the household recording to all age groups (which certainly overstates demographic viewing even more).

VCRs are a Much Bigger Problem Than DVRs

In primetime, more than 30 regular series have over 6% of their audience due to VCR recording.

DVRs won't have that type of impact for at least another five years.

As Nielsen moves toward time-shifted reporting, and the industry is pressing for more granular measurement, one would think this would have been the perfect opportunity for Nielsen, as it introduces DVR playback, to remove VCR recording from its reported ratings (which they have acknowledged they can do with relative ease).

So Why Won't Nielsen Act? I drafted a letter to Nielsen on behalf of the AAAA Media Research Committee stating in no uncertain terms that removing VCR recording was a top priority.

In Nielsen's recent report to the industry on how it plans to handle time-shifting, it stated, "We have been asked by some clients to remove VCR Record from the current estimates. ...However, for trending and consistency purposes we will leave VCR crediting as is."

SOME CLIENTS? TRENDING and CONSISTENCY PURPOSES? Are they kidding? This is an outrage. Advertisers and their agencies should not stand for it.

Nielsen and some others have said that DVRs are replacing VCRs anyway, and the impact of VCRs will lessen each year. So what's the big deal?

Well, many people in our business may have DVRs, but most of the country does not (current penetration is around 8%). They continue to happily use their VCRs. Even five years from now, DVR penetration should only be around 40% of the country. More than half of viewers will continue to have and use VCRs.

Magna Global Will Not Use "Live + VCR Recording + 7 Days of DVR Playback" data in negotiating with the networks.

Why? Well, we know from previous research that roughly one-quarter of what's recorded on VCRs is never played back--and at least three-quarters of played back material involves the use of fast-forwarding over commercials.

So we are already paying for phantom viewers.

Now we're expected to add DVR playback on top of that? We know from a number of published and custom studies that more than 75% of DVR owners claim they often or always fast-forward through commercials. This rises to more than 90% for those who have owned a DVR for more than one year.

Aside from the fact that DVR playback will simply add in viewers who are not seeing our commercials, a movie company advertising a Friday opening on Thursday does not want viewing from next Tuesday included in the ratings. Likewise a retailer advertising on Wednesday through Friday for a Saturday sale, does not want to pay for people who might be viewing up to a week after the sale ends.

Only if Nielsen removes VCR recording would we consider using even ratings based on "Live plus Same Day of DVR Playback."

Reprinted from Magna Global USA's Nov. 8, 2005 "Television Insights" report.