Networks defend home recording

Listen to this article

00:00
00:00

The largest US broadcast television networks on Wednesday united to mount a defence against claims about TiVo and other digital video recording devices.

The networks argued that the recording devices were helping to build, not erode, audiences for their programming and the accompanying advertisements.

The unusual meeting, which featured representatives from five of the largest US television networks, reflected the concern that has swept through the industry with the advent of DVR systems that allow viewers to watch programmes when they choose and to skip ads.

While DVR has penetrated just 7 per cent of US households, many Wall Street analysts have cited the new technologies in their glum assessments about the future of ad-supported television.

They have also pointed to growing competition from cable television and the internet for viewers and advertising.

However, the networks argued that assumptions about the threat from DVRs were drawn from anecdotes and studies of early users, who tend to differ from mainstream consumers.

Armed with new data from their own research departments as well as Nielsen
and other ratings groups, they claimed that the portion of ads lost to DVR users was more than offset by the 12 per cent increase in television viewing by those households.

“I can’t remember a situation when so many pundits, analysts and forecasters have been wrong about so much for so long,” said David Poltrack, head of research at CBS. “The DVR is going to enhance and increase the viewership of major network TV shows, and increase viewership of ads.”

One Nielsen study from August, for example, found that DVR viewers in seven US markets helped to boost their audience by 4 per cent.

The top-rated network programmes, such as Desperate Housewives, CSI and Lost, tended to pick up the most viewers because DVR owners had the ability to watch popular programmes scheduled at the same time, or episodes they had missed.

Assuming DVR penetration increased to 40 per cent of US households by 2010, as predicted, then the added audience could amount to 20 per cent, Mr Poltrack said.

Meanwhile, Alan Wurtzel, head of research at NBC, cited internal research that found 58 per cent of DVR owners paid attention to ads even as they fast-forwarded through them, and 53 per cent rewound to ads they had mistakenly skipped.

He also noted that 80 per cent of viewers preferred to watch television programmes live. “Most people want to watch TV the way God intended – they want to watch it live,” he said.

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't copy articles from FT.com and redistribute by email or post to the web.