The Shift in Time-Shifted Viewing

Today’s guest blog post is from Rob Bienes of Discovery Communications’ Ad Sales Research team.

With the increase in DVR penetration, it would be natural to expect to see more time-shifted viewing and more fast-forwarding through commercial breaks.  However, when Discovery Communications examined prime time viewing for the first four months of 2012, we were surprised to find that that was not necessarily the whole story. The impact of time shifting on individual hit entertainment programs is significant and in line with expectations but, for broadcasters, the impact of video on demand (with fast-forwarding disabled) is helping to retain C3 audience in spite of increases in time-shifted viewing.

Time-Shifted Viewing Continues to Increase Overall; Sport and News Maintain Their Live Viewing
With late adopters finally signing up for DVR services, household penetration is at an all-time high of 43%, up from 40% in 2011 (Source: Nielsen DVR Estimate Penetration, May 2012). As DVR penetration goes, so goes time-shifted viewing; over the same period ad-supported cable time-shifted viewing increased from 11% to 14% and broadcast, at double that growth rate, increased from 24% to 30%.

Cable networks such as AMC, Discovery, History, ABC Family, Lifetime & Syfy have 20-23% of total prime audience time shift, with MTV at 30%, and Bravo leading the pack at 32%. Original, water cooler programs are the biggest drivers of time-shifted viewing. For top cable programs, the percent of total audience that is time shifted can be 40% and higher. AMC’s hits, Mad Men (62%) and The Walking Dead (52%), and Bravo’s signature Real Housewives franchises (more than 50%) and Top Chef (62%) have some of the highest levels of time shifting across all of cable.

In contrast, news and sports programming continue to be watched live. For news networks, 93% of viewers watch live and for sports networks 94% watch live. Other networks that had a high proportion of viewers watching live were TBS and TNT. A closer look into the programming on these nets shows that their live viewing is a result of sports and acquired off-net shows, which typically are less time shifted.

Moreover, time shifting continues to be a double-edged sword – bringing an upside in audience potential, but leading to reduced commercial retention. With DVRs, half of the commercials are skipped during playback. Not surprisingly, Bravo and MTV stand out as being the most time-shifted networks with the lowest commercial retention. Both networks commercial audience is more than 20% below their program audience (index is below 80 for commercial retention). This is even lower than the broadcast networks, which have an index in the mid 80s.

Time-Shifted Viewing - Chart 1

When Does Playback Occur?
While time-shifted viewing is defined as the difference between Live and Live+7 program audience, we did look at when playback actually occurs. Most playback happens within the first three days as Nielsen’s Live+3 data stream makes up 98-100% of the total viewing for 75 of the 86 cable nets. All of the big four broadcast networks have more than 96% of viewing occur within the first three days. The same pattern holds when looking at commercial data. For 83 of 86 cable networks and the top four broadcasters, 98-100% of the total commercial viewing happens within the first three days.

For individual programming, the proportion of time-shifted viewing beyond the third day is more significant. These programs deliver a bonus for advertisers paying based on the C3 metric. Both USA’s White Collar and AMC’s Mad Men experience a 7% increase in commercial viewing for days four through seven.

Time-Shifted Viewing - Chart 2

Has Commercial Retention Declined?
Fortunately, for cable as a whole, commercial retention has changed little in 2012 compared to 2011 although a few cable networks with hit entertainment programming did experience declines in commercial retention. AMC retained 88% of their program audience during breaks in 2011, but only 83% in 2012. Original breakout hits Mad Men and The Walking Dead drove the decreases in commercial retention. ABC Family also had weaker commercial retention due to high time shifting on The Secret Life of the American Teenager and Pretty Little Liars.

Time-Shifted Viewing - Chart 3

Surprisingly, the top four broadcast nets’ overall average commercial retention has barely changed since last year. ABC, CBS, FOX & NBC have seen commercial retention remain the same, even as time-shifted viewing for these networks grew five points to an all-time high of 30% in 2012.

Time-Shifted Viewing - Chart 4

Broadcast’s ability to retain C3 audience over the past year may be a result of their recent transition to the VOD platform for their more successful programming. VOD is being made available immediately after air and with full commercial loads. This viewing is being included in Nielsen’s C3 audience for the first time beginning this broadcast year. Since fast forwarding is being disabled by the distributors, broadcast is able to gain the additional time shifted viewing without losing commercial audience.

One way to test this finding was to look at non-DVR households for 2011 and 2012 and verify whether or not the broadcast networks experienced an increase in their time-shifted viewing. The broadcast networks did in fact have year-over-year growth in their time-shifted viewing for non-DVR households.

Time-Shifted Viewing - Chart 5

Download a full summary of Discovery Communications time-shifted viewing research.