According to a Mediaweek article, DVR viewership continues to rise, and the impact is quite startling. Magna Global USA released data on DVR usage and ratings from the past TV season. It found that even though just 25% of TV homes have a DVR, "the current impact of DVR viewing on ratings is twice as high as the impact of VCRs when they were in 90 percent of TV homes." What this means is that DVRs account for 9 percent of the Big Five networks’ TV ratings, and 15 percent of viewing by adults 18-49.
Of course, the growth of DVRs and their impact on television viewing will only accelerate. Magna is projecting that in just four years, nearly 25 percent of all prime-time viewing on the broadcast networks among adults 18-49 will be time-shifted.
While the report doesn't address the impact of DVRs upon ad viewing, I think we can all guess how time-shifting alters consumers' exposure to TV ads. What will happen in 2012 when key consumer demographic groups are zapping 25% of marketers' TV ads? And what about online TV viewing? The Magna report didn't consider online viewing of prime-time shows, which is yet another way that technology is chipping away at television's viewership, ratings, and ad dollars. I watched two of this season's 14 episodes of "Lost" on ABC.com, and I actually found the experience more pleasant than on broadcast television, with much briefer commercial interruptions.
Why are consumers shifting away from live TV and towards DVRs and online TV? Part of it is an issue of control, but I also believe it is because consumers increasingly perceive the TV ad channel as being unwelcome, intrusive, and valueless. Yes, I know the ads pay for the free content, but consumers are being so bombarded with advertising that they no longer are able to perceive value in television as an advertising medium.
It doesn't help that networks keep cramming more and more ads into their programming. According to Wikipedia, in the 1960s a typical hour-long show would run for 51 minutes excluding advertisements. Today, a similar program would only be 42 minutes long. The incessant creep toward less entertainment and more ads is continuing today; network prime-time commercial time in 2006 rose 2.4% to 5,429 minutes. Why, in the face of a growing consumer revolt against ads, the networks would decide the appropriate response is more advertising is the kind of question better left to psychologists and philosophers.
TV networks might find a way to reverse or at least slow consumers' avoidance of TV ads by seeking to make TV advertising more appealing and welcome. This could be done by decreasing the number of ads, increasing content time, raising ad rates, providing a better experience to consumers, and allowing brands to cut through the clutter with fewer interruptions and greater sponsorship and affiliation with particular programming.
As discussed on this blog in a post about the Experiential Marketing Continuum, consumers are exerting more power and influence in the channels available to marketers, so marketers must consider ways to pull consumers with value-added marketing rather than alienate consumers with intrusive and unwelcome ad tactics. It's easy to divine the channels consumers find unwelcome--these are the channels in which consumers strive to eliminate or filter ads, even if it means paying to avoid advertising.
If TV networks do nothing--or worse yet, crush still more ads into prime time--an upheaval in the marketing and entertainment space could occur as soon as within 5 to 10 years (or roughly as many years as "American Idol" has been on the air). I'm not a sufficient futurist to know what this will mean to free television, but I suspect ABC, NBC, CBS, and other free networks will become paid channels a la HBO (which has, of course, offered some of the most buzz-worthy and critically-praised original series of the past decade). Since Americans are already accustomed to paying extra for cable or satellite access, and since they're accepting the price of DVR service as a cost of TV enjoyment, this shift may be less earth shattering than it seems at first glance.
If decreasing ad time sounds unrealistic, check out how advertising is working online on sites such as ABC.com and Hulu.com--the number of ad interruptions are the same, but each is shorter. I haven't seen any data on viewership, skipping, or perception of advertising within Web-based TV yet, so all I can do is share my own perceptions. For example, because of the briefness of the interruptions, I've found that I have no objection to the fact the ads cannot be skipped online. And, either by accident or in an act of brilliant foresight, the ad interruptions in online shows are so short that consumers can't use the time to get up and go to the bathroom or grab a bite in the kitchen, so each ad is actually viewed in its entirety.
No matter what happens to free TV and television advertising, marketers must recognize how weary consumers are becoming of our advertising-saturated society. According to a 2004 Yankelovich Partners poll, 65% of Americans say they are "constantly bombarded with too much" advertising and 61% think the quantity of advertising and marketing they are exposed to "is out of control." The way to overcome this backlash is to focus on the sorts of channels and tactics that encourage acceptance within consumers.
In the new, consumer-controlled marketing world, those of us in the industry need to find ways to not simply avoid annoying consumers but to get them to seek us out. The way to do so is to shift our marketing mix to more welcome and desired ad media and marketing strategies. Experimenting with shorter or fewer ads is one way to make the television medium more welcoming to consumers, but the biggest bang for the buck will come from marketers exploring newer and more valuable (to consumers) marketing channels.