MAGNA issues 2009 Primetime Preview


Steve Sternberg, MAGNA’s EVP Audience Analysis, says, the launch of the new primetime television season is still three months away. Repeats and reality are taking over the broadcast airwaves, and many viewers will turn to cable, with its summer menu of originals, as they do every year at this time. MAGNA recently attended the five broadcast network new season schedule announcements, where they were informed that television is still the best way to reach consumers, no one is really watching TV online, and broadcast TV is far more effective than cable. From the report:

“It‘s no secret that the broadcast networks have problems. Every year their audience shrinks a little more, siphoned off by an increasing array of cable channels that are investing more in both original and acquired programming (largely the broadcast networks’ own former hits).

But if cable was still the only thing the broadcast networks needed to worry about, they‘d be in a much better mood.

DVR penetration continues to inch upward, currently standing at about 31% of TV households. Unlike VCRs, which never lived up to the promise (or threat) of allowing viewers to program their own networks to watch at their leisure, DVRs are doing just that (at least in the homes that have them)—and making commercial avoidance easier than ever. The impact of DVRs on television ratings across the full day is minimal. Even in primetime, where DVR activity is most prevalent, it only accounts for 6% of overall television viewing. But among the broadcast networks, it‘s 15%. That‘s because more than 40% of all primetime viewing to the broadcast networks in DVR homes is time-shifted.

Is that a bad thing for advertisers? MAGNA has long speculated that the DVR audience is, in fact, more valuable than the live audience. DVR playback is the essence of appointment viewing. You select a program to record, and you decide to watch it now. You are almost certainly a more attentive viewer. We also believe that when you are watching something via DVR playback, you are probably less inclined to be doing other things at the same time. There is mounting evidence that we were correct.

The Council for Research Excellence‘s landmark Video Consumer Mapping Study has, for the first time, quantified media multitasking. According to the VCM study (conducted in spring and fall 2008), 59% of the time, DVR playback was the only medium used with no other life activity (compared to 45% for live TV, 33% for any print, 18% for any computer, 11% for computer video, and 2% for any audio). There is no longer any doubt that viewers are more attentive during DVR playback than they are with other media.

Data from both Nielsen (minute-by-minute) and TiVo (second-by-second), shows that 35-40% of commercials are typically not fast-forwarded during playback. C3 ratings take delayed commercial minute viewing into account, so we are actually better equipped than ever to evaluate the relative value of one network or program versus another.

Online video streaming of TV shows, while receiving lots of press coverage, is not yet significant. Both Nielsen‘s Three Screen Reports and the CRE‘s Video Consumer Mapping Study have demonstrated that depending on the demo, watching television on a TV set still accounts for 97-99% of video screen viewing time. Internet and mobile video are currently not significant.

 One very interesting, but little noted, finding of the VCM Study, however, was that the daily reach of online video streaming has nearly equaled the daily reach of DVR playback. But viewers spent only about 15% as much time watching streamed videos as watching TV content on their DVRs. This is obviously a result of the shorter-form video content that currently dominates the internet. Over the next year or two, however, that may change. Hulu has been aggressively advertising on its network television partners‘ airwaves. And now with Disney acquiring an ownership stake, ABC, NBC, and FOX will all be heavily promoting the service.

In the past year, the number of Hulu‘s unique viewers has tripled (to about 7.5 million in April 2009). During the same period, the time spent per stream rose by 33%. We do need to keep in mind, however, that the average time spent per stream on Hulu is still just 6½ minutes. This means, of course, that full-episode streaming is not yet significant.

But even a sharp increase in online video streaming won‘t necessarily take much away from traditional TV, and may well add new viewers. While many tend to think viewers are so loyal to their favorite shows that they watch every episode, the fact is that even for the most popular shows, viewers only watch two episodes of a show per month. So the availability of programming on alternate and more mobile devices, may well add new viewers, who now can watch that third or fourth episode.

Traditional television is no longer necessarily the first screen for younger viewers. The average median age of the broadcast networks keeps rising. Not long ago, CBS was by far the oldest network, with a median age above 50. But ABC and NBC have gradually gotten older, and are hovering near 50 themselves. Even FOX, now has a median age over 40. And CW, the one broadcast network that still has a median age under 35, is struggling to manage even a 3 household share.

Clearly the broadcast networks are challenged to develop scripted programming that will bring back some of their disenfranchised viewers. Unfortunately, the days are long gone when a Miami Vice can start out slowly and become a word-of-mouth hit over the summer. Or a Cheers can debut as the lowest rated show on the air, get renewed, and eventually become a record-setting hit. Or a Seinfeld can be given three seasons to find an audience. Or even when an Everybody Loves Raymond can start out as a low-rated Friday show, switch nights, and become a classic.

And that‘s a shame because just when the networks need to give shows time to build an audience, they often wield the axe far too quickly—particularly for shows they don‘t own. With all the viewing options available today, it often takes a full season or more for viewers to even become aware of a new show, much less start watching it. Even those of us who follow television for a living, often have to refer to schedule grids to remember what‘s on (and what night and time it might be on this week). Imagine what the average viewer at home goes through.

But all is not gloom and doom. The television audience is continuing to splinter, but viewers are not leaving the medium altogether. Nothing, not even a lengthy writers‘ strike, was able to take away from overall television usage. Depending on the programming, people shift from one channel to another, but they don‘t leave the medium. Emerging video platforms and devices (so far) have been additive.

Over the past decade, the combined broadcast and ad-supported cable network ratings have been remarkably stable across virtually all age groups. Why? Because television remains the only medium where the message is still sit back, relax, we‘ll entertain you, you don‘t need to interact or do anything. Still an incredibly appealing prospect to most people—at least those who work for a living.”