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DVR Penetration and Television Use

February 14th, 2008

In 2003, The Yankee Group predicted in a report – entitled “The Death of the 30-Second Commercial” – that 11%, or $5.5 billion, of the $50 billion spent on TV advertising would be wasted, thanks to Digital Video Recorders (DVRs or PVRs).

“I think [TV advertising] really starts to be less effective as PVR penetration takes off, which we’re anticipating will occur over the next two years,” Aditya Kishore, The Yankee Group’s analyst who authored the report, was quoted as saying.

This week, The Nielsen Company said that playback from DVRs is actually increasing the amount of time people spend watching television, with viewing increasing 3% at 9:00 p.m. and 5% between 11:00 p.m. and midnight.

The periods compared were November 2005 and November 2007, during which time the DVR penetration level in Nielsen’s sample nearly doubled from more than 11% to nearly 22% in U.S. households.

TiVo, the company most identified with the DVR trend, has been unable to capitalize in any significant way on surging DVR sales. But its vaunted interface recently launched on Comcast cable TV in the Boston area, bringing hope to TiVo aficionados everywhere.

While Nielsen has yet to specify how much advertising DVR users are skipping, it appears that rumors of TV advertising’s imminent death may be premature.

Entry Filed under: Consumer Electronics