« Lawrence Taylor latest shamed athlete to lose endorsement | Main | Are store brands as good as the national brands? »

May 07, 2021

DVRs not dooming TV ad revenue as expected: study

1265955_my_remote There are a few “can’t go back” items in the world of consumerism, products or services that – once you make the jump/upgrade – you can’t possibly retreat back to the simpler version.

HD TV is one. Heated car seats are another. So is air conditioning. And, if you’ve laboured in a single bed for years, a queen size mattress is a luxury surely no one can pass up.

A newcomer these days has undoubtedly become the digital video recorder (DVR), a device so sublime any savvy TV watcher never has to a view another commercial.

Business-wise, DVRs seem like a quite nasty product to networks, who largely rely on ad revenue to operate their business. More DVRs mean, in theory, less people are watching commercials. So ad revenue has to be plummeting these days, right?


Quite to the contrary, actually, according to numbers from the Wall Street Journal and a study on DVRs from a professor at Duke University.

In a surprising turn, Duke’s Carl Mela has shown that DVRs are actually having little impact on advertising, as the ability to skip trough ads has had “no effect on buying behaviour and that not as many people fast-forward through television commercials as originally feared.”

His key reasons:

1. About 95 per cent of people still watch TV live, meaning they can’t skip ads
2. The ability to record a show and view it later leads to consumers actually watching more television, and
3. While viewers fast-forward through 70 per cent of commercials in shows they recorded, they still look at the screen to know where to resume play, meaning they’re still catching the TV and being exposed to advertisements

It all sounds good on paper, when you sit back and look at it. And, indeed, the proof may be in the numbers. CBS announced this week its first-quarter ad sales grew by an impressive 17 per cent this year, a peak not entirely to credit on the network carrying February’s Super Bowl.

Yet the sceptic in me wonders if this data can sustain.

DVR users out there: don’t you fast-forward through as many commercials as possible? Wouldn’t your behaviour dictate the opposite of CBS’ numbers and the Duke University study?

By Jason Buckland, MSN Money



Post a comment


Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...