Is timeshifting killing television advertising?

Timeshifted television means fast forwarding ads

Timeshifted television means fast forwarded ads

I am a TV content consumer, but I don’t necessarily watch free to air or subscription television at the time its aired. With a Foxtel IQ box, time shifted TV has become our household norm, and as a consequence I find myself reflective of a growing revolution taking place.

Nielsen report 37% more consumers are watching programs via DVR (digital video recorders) which timeshift TV, rising about 9% in the fourth quarter from the third quarter. The other key of the report is that viewers are watching their television content online, and on mobile devices rather than watching it through the television itself.

Nielsen’s report covers the US but the same trends are taking place here in Australia. Foxtel is now in nearly 1.6m Australian households. One-third (more than half a million)of these subscribers have a Foxtel IQ digital video recorder. Subscriber’s are up 7% and Foxtel’s revenue is up 13%

So instead of watching TV when the advertisers and the networks intended them to be watched, viewers are watching them in a different timezone or online or on a mobile phone. The viewers who watched TV online consumed even more video content, to the tune of another 3 hours per month. Even Nielsen’s report is called the “3 Screens Report” reflecting the fact that the traditional TV screen is only one of the delivery mechanism for television content.

This has big implications for content developed for network TV where traditional ratings are the way to secure advertising dollars and hence operating revenue.  So here’s the dilemma:  two shows hitting lows on American TV are “Heroes” and “Chuck”, yet they are both getting great audiences online with “Heroes” coming in at 5th overall spot for December 08. “Chuck” is in an even more interesting position, when ranked by time spent per viewer in December, Chuck comes in at number 2 with 163 minutes spent per viewer. The key quote from Nielsen is this:

Advertisers should be looking to balance overall reach with minutes per viewer, since those programs with longer viewing times are ones where consumers are much more likely to actually watch the advertising.

Here is the dilemma, do advertisers bury their head in the sand and use TVC’s as the key for building brands, buy the media placements assuming demographic data is still current for “prime time” and continue to ignore the writing on the wall for traditional television viewing?

Or do they really believe the growing number of people with DVR’s will stop and watch the TVC’s when watching time shifted content? I have to admit to stopping for ads occasionally, more a rewind when I skip past it and feel its worth a look, but then again I work in advertising, and I like best ads on tv. But forgive me for not stopping for Brand Power.

And when dramatic content is delivered online, how do advertisers use the medium to its best advantage, rather than sticking to the “traditional” format of pre-rolls or “commercial breaks”?

So how do you consume television? Is it timeshifted? Streamed online? Podcast and on your mobile? And do you ever stop for ads? Drop a comment and join the conversation.

  • Peter

    Anyone who has a PVR timeshifts – the benefits are so obvious. But it gets worse for those in TV media. I timeshift life TV now. If you start an one hour show 10-15 mins later than the scheduled start time then every add break gets fast forwarded and by the time the show finishes you are ‘live’ again. Live TV without the ads. good for me – bad for those in TV media

  • I do the same thing Peter. Start a TV show – go and do 15 mins of work and then Fast Forward thru the commercials – it makes watching TV a much better experience.

  • PVR manufacturers need ad-supported free-to-air TV as much as networks do, so I’m sure they’ll work something out as the PVR market plateaus and there’s less of a gold rush to try and claim a bigger slice of the PVR market than your competitors.

    My guess is three changes to come:

    (1) Dumbed-down PVRs for free-to-air that work like Foxtel’s IQ and 7’s version of TiVo – you can skip some of the ads, some of the time;

    (2) More time slots where the dominant revenue source is SMS sweepstake/quiz or ‘home shopping auction’ programming spliced in where the ads would be (program production costs/quality would need to fall and interactive audience increase); and

    (3) More ads being funny to discourage the audience from skipping – look to the amount of comedic ads on US TV, where ad breaks have always been longer and more frequent and ad-skipping has been mainstream for almost a decade. Pretty ads aren’t watched repeatedly, shock ads aren’t watched repeatedly, and annoy ads certainly aren’t watched repeatedly. But good comedy will be watched again and again, and we’ll even rewind and call in other household members to watch it with us.

    …so: a world with dumbed-down PVRs for everybody, where all programming outside of peak is gambling/shopping, and where all peak ads are trying their best to be Superbowl-quality funny. And that’s just for the masses. The middle and upper classes will be buying their TV by episode or by series from their AppleTV/Netflix STB and only ever having to watch paid placement advertising ever again.

  • Tiphereth Gloria

    Interesting points, I am hoping for more of number (3) and least of number (1).
    Home shopping type ads are so common now in US, check out the E! Channel here for the Steam Buddy – the Snuggie can’t be far behind.
    Funny/entertaining/great creative ads winning in this scenario is a good thing, a la Superbowl spots.
    And I will be definitely buying TV by episode and series whenever available.

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