While having the utmost respect for Nielsen Media and all of its offshoots, there is something distinctly fishy about its latest report on US TV viewing habits, part of its A2/M2 Three Screens Report.
The company is asking us to believe that the US public ‘ despite fighting their way through a recession, despite increasing their viewing of video on the internet and on handsets ‘ are watching more and more TV. We don’t think so.
Reading between the lines, and after checking all the numerous provisos that Nielsen issued with the report, it is possible that the company has made one tiny error. By including DVR viewed TV among its numbers and only counting programs watched within 7 days of them being recorded, we worry that when a family watches a DVR recording of an hour long program, and yet fast forwards through the 25 minutes of advertising that it contains, Nielsen puts that down as one hour of viewing, when it should in fact be 35 minutes plus 5 minutes messing about with the remote.
The mantra for DVRs when they were introduced is that they allow you to watch more TV in less time, and that is definitely true. So the 142 hours a month that Nielsen says US viewers now spend watching TV might be re-interpreted as viewers watch 142 hours of programming, it’s just that they do it in something more like 130 hours of their time, or any number south of that 142 hour figure.
In advertising and promotional materials Nielsen doesn’t say that it didn’t count like this, and it is quite clear that anyone that says they watched a one hour program is NOT going to volunteer to a company which counts viewing hours for every advertiser out there, that they fast forwarded through the adverts. Nielsen has been famous for cooking its opinions ‘ initially it told the world that 80% of DVR viewed programming involved fast forwarding through the adverts, and then it changed its tune to suggest that perhaps it’s not as bad as all that, after its findings threatened to wreck negotiations for the US Upfront advertising spend a few years back, when advertisers began to realize that they were being shortchanged.
Nielsen goes further in this report and says that the ‘increase’ in US TV viewing hours includes both DVR programs recorded in the last 7 days as well as DVD viewing. We’re really not sure how DVD viewing contributes to advertising views, and to be fair Nielsen never came out and said that it did. However issuing research of this type ‘implies’ that we can all relax, everyone is watching more TV.
Given Nielsen’s reliance on advertising agencies for most of its money, the company has to be the ‘least’ reliable source on just how much TV people are watching. In about a month the Pew Internet and American Life project will issue its annual data on TV viewing and internet use, but harking back to last year it said that 29% of youngsters (and 25% of all people interviewed) admitted that using the internet means they watch LESS TV. There was no figure for people saying that the opposite happened. Either they thought it did NOT affect their TV watching or they were part of the 25% who watched less.
And just to augment what we were saying, IBM has just issued a survey which also contradicts Nielsen’s conclusions. IBM’s annual survey of consumers’ digital media and entertainment habits took in 2,800 people in the US, UK, Japan, Germany, India and Australia and found that 76% of people are now watching videos on their PCs, and those who watch online videos say that they watch less TV. Of these some 70% say they prefer ad-supported content over pay-per-view or subscriptions.
The new Nielsen figures appear to say the opposite, which is why we looked for where the flaw was likely to be. It could be we are entirely wrong, and that the recession has changed people’s behavior and they have stopped going out to restaurants and cinemas and are staying at home to watch more TV. But we doubt it very much.
Nielsen says that the 142 hours a month represents a increase of 5 hours a month over last year. It also says that American spend 6 hours a month watching DVR recorded material. Now if we assume that 25 minutes of each of those 6 hours is advertising that is skipped through, that accounts for around 2.5 hours or half of the increase. If they also skip through inaction in sport events and a few boring parts of films like the credits etc.. then we are left with a figure that is remarkably close to last year’s 137 hours.
You can take this type of analysis further and point out that with DVRs being installed in around 25% of homes, what is actually going on is that the DVR contingent is watching perhaps four times as much timeshifted video as Nielsen reports (it divides the total DVR hours between ALL households) so that DVR homes are more likely to be 24 hours a month in the homes that have them and zero in the homes that don’t. The likely outcome is that as DVR penetration continues to rise, TV viewing hours and especially advertising viewing hours, will be severely eroded. But we’re not sure that we would trust Nielsen to tell us that.
Nielsen also says that mobile handset video viewing is rising, and that where people watch video on their handset, they are having an average of 17 viewing sessions a month, at roughly 15 minutes a session, taking up 3.25 hours of viewing time. The company estimates that 10.3 million of mobile consumers watch TV or video on their cell phones and say that mobile video viewing has increased 14% compared with Q2. This is a bit disingenuous as well, because in the fine print Nielsen admits that it now counts people that watch video on their handset, but who don’t pay for a subscription, whereas in the past it only counted those that paid for a video service and specifically excluded anyone watching video over the mobile web. Not too surprising that viewing habits have radically changed then. The same for viewing online video, the metrics have been changed for this report so its not comparable with last time.
The Apple’s iPhone had to get a mention and Nielsen says that it was the top device among mobile video viewers, with 9% of mobile video viewers citing the iPhone as their primary cell phone.
The challenge for the future is for advertisers and free video services to accurately monetize their offerings across three screens and develop new advertising systems which will hold attention without relying too heavily on the interruptive 30 second video ad format that dominates on today’s TV. They need a genuine DVR strategy, with new overlay and voluntary advertising formats, and more reliable interactive and addressable advertising systems for internet and mobile advertising. Burying heads in the sand and hoping that TV viewing will go up, is not really an option, no matter what Nielsen tells you.