"Ad skippers and time shifters are an emerging breed of television viewer, and for those wedded to the traditional TV model that may seem like a frightening thing," says Ben Macklin, eMarketer senior analyst and the author the new US DVR and VOD Usage: Ad Skippers and Time Shifters report. "But those willing to adapt to this new breed of viewer will reap many rewards."
Digital video recorder (DVR) and video-on-demand (VOD) usage is on the rise in the US, there is no question of that.
With one in four TV households able to access VOD and nearly 16% having a DVR in 2006, a change in TV usage should be reflected in the data. But it is not.
In fact, the latest projections from Veronis Suhler Stevenson (VSS) indicate that TV advertising spending in the US will grow from $71.1 billion in 2006 to $87.2 billion in 2010.
While VSS does not forecast DVRs to reach 30% of households by 2010 (unlike eMarketer), the company clearly feels that any potential TV advertising spending foregone as a result of DVR usage will be more than offset by spending in other areas. eMarketer agrees. Panic aside, online advertising spending will benefit from changing TV dynamics.
Many DVR owners skip the majority of ads they come across, but to date there is little evidence that TV viewing has radically changed since DVRs and VOD came to market. According to the Leichtman Research Group, only 4% of all TV viewing was watched on DVRs or by VOD in 2006, up from 2% in 2004.
TV viewers have been changing channels to avoid ads since the introduction of the remote control. TV advertisers have been factoring in this cost for years, so TV ad avoidance is not a new phenomenon.
"The alarmist claims that DVRs and VOD will bring about the death of TV and the loss of billions of advertising dollars are just plain wrong," says Mr. Macklin. "More people will watch more TV and video content in the future, not less. They will just be doing it in different ways — and that opens a whole new world of opportunities."