What’s Really Happening with TV Viewing? Response to a Reader Question

I had a very interesting phone conversation with the CEO of a TV network group who is one of Rentrak’s clients. He had read the earlier blogs on the shift in viewing across time and to other platforms which led him to ask me: Is the number of networks, series and telecasts viewed increasing on the other platforms?

In short, does DVR, Video on Demand (VOD) and Over the Top (OTT) usage show increases, not only in the number of hours, but also in the number of series and telecasts watched?[1]

The answer is yes. DVR usage is up in terms of hours, series and telecasts watched. In future blogs, I will look at other platforms.

To get an answer, I did what only Rentrak can do: I looked at over a million homes across four years to find out.[2]

First, it is clear from the chart below that there has been an increase in DVR playback hours, as indicated in earlier blogs, going to 9.5 hours in the week—a shift up of 11 percent.

BruceBlogCharts-July9_01-4

The change in DVR series watched was also positive, rising to 14.4 series watched in November 2014—a 5 percent increase.

BruceBlogCharts-July9_02-4

Finally, drilling into the detail of telecasts played back via DVR, we can see an increase of 6 percent to 18.5 telecasts played back during the week.

BruceBlogCharts-July9_03-3

DVR is increasing across the board.

A couple of caveats here: I only looked at one component of viewing—the DVR. VOD and OTT are not in this blog. They will come, dear reader, they will come!

Second, by controlling for common households across the years and common networks, I under-reported the total increase in DVR viewership since newer, bigger-capacity DVRs such as the Hopper are not included in this analysis, nor is the fact that the viewing household has more viewing choices in 2014 than in 2011.

Third, I only looked at one week of DVR playback. That means I excluded the “long tail” of DVR viewing after seven days. Rentrak tracks up to 28 days of DVR playback.

However, having an “apples-to-apples” approach means that we can truly say the differences in viewing behavior were not due to any changes caused by having different households or networks in the sample.

Bottom line, DVR usage is increasing in key areas of viewing behavior.

I’d love more reader feedback. Any thoughts on how to slice this cake? Either comment below or send me an email at bruce.goerlich@rentrak.com or call me at 212-810-2437.

[1] I had provided a version of this information already to him, but thought that you, dear reader, would be interested as well.

[2] Here are the details for those who find such things “boring.” We looked at common viewers across four years so the data trend was “apples-to-apples.” That is, we used the same Rentrak households who showed up as viewing TV on a DVR in our Rentrak massive and passive footprint for the second week of November in 2011, 2012, 2013, and 2014. That gave me 1.2 million homes. In order to manage the size of the data set, we only looked at one weeks’ worth of viewing, the second week of November, which put the data beyond elections and the World Series. We also only looked at the same common 101 networks, which we reported on in each of those years. Viewership for the purpose of this report was based on at least one minute of viewing to a telecast or a series. Viewing levels are actuals, with no projections applied.

In case you don’t know, I am Bruce Goerlich, Chief Research Officer at Rentrak, the global standard in movie measurement and your TV Everywhere measurement and research company. I have been in the research end of the marketing business for more than 30 years primarily on the ad agency side, with my last stint prior to Rentrak in the role of President, Strategic Resources Zenith Optimedia North America. Somewhere along the way I morphed from young Turk to old fogey. Now that I have grey hair and am horizontally-challenged, I can speak with some authority on advertising and research issues – which I will do from time-to-time on this blog.

Row, Row, Row Your Content, Gently Down the Stream: Insights into Viewing on Multiple Platforms

It’s not news that the consumption of TV and movie content is evolving as consumers gain more options to control what they watch, when they watch it, and on what device they watch it. Rentrak classifies these new options as all being “On Demand” viewing. In this blog, I’ll focus on some interesting factoids floating along the On Demand stream.

First off, let’s describe this new landscape (in other words what’s the jargon mean?):

Over the Top or OTT
Refers to delivery of video over the Internet without the involvement of an operator like a cable, satellite or telco company in the distribution of the content. Examples include Netflix, Hulu, and Amazon Prime. Let’s break this out in more detail in terms of how consumers pay for the content (if at all directly).

Over the Top Subscription Video on Demand or OTT SVOD
Consumers pay a recurring subscription fee for theatrical or television content streamed over the Internet from providers like Amazon Prime, Hulu Plus and Netflix. Some providers supplement that content with advertising as well, like Hulu Plus.

Over the Top Ad-Supported Video on Demand or OTT AVOD
Companies like Hulu, YouTube, Crackle and others offer content streamed over the Internet on an ad-supported basis (i.e. at no charge to viewers).

Internet Video on Demand or iVOD
Viewers pay specific rental fees to be able to view movies over the Internet from digital retailers like Amazon Instant Video, Google Play, iTunes, PlayStation Store, Xbox Video, and Vudu. A base subscription fee is not required and the movie is usually available for 24 to 48 hours. Due to the low price on a per-episode basis, TV content is no longer made available via iVOD, only on EST (see below). There is no advertising on iVOD.

Electronic Sell-Through or EST
This is where a person pays a fee to “own” a specific movie or TV show, either for perpetual access via the cloud for streaming on Internet-connected devices, or for downloading to a local device (e.g. a PC, game console, or mobile device) for storage and access without need for an Internet connection. The major digital retailers here are also Amazon, Google Play, iTunes, PlayStation, Xbox and Vudu, with both Comcast and Verizon offering EST among multichannel video programming distributors. No advertising is in this content, though upgraded offerings through certain digital retailers like iTunes may include menus, trailers, and bonus content to add value and replicate the DVD/Blu-ray Disc viewing experience.

Operator-based On Demand or “Cable Video on Demand” or cVOD
Here is where On Demand started. It is cable, satellite or telco operators providing their subscribers with access to content. To confuse the issue even more, there are three types of cVOD:

  • Subscription Video on Demand or SVOD
    When customers subscribe to pay TV services like HBO, Showtime or Starz, often the operators will offer the ability to watch these channels’ movies or TV series On Demand. There is no paid advertising, but there may be program promotions.
  • Transactional on Demand or TOD
    This is renting a movie (even Adult!) or special event (WrestleMania!) from an operator for a fee. There is no paid advertising, but there may be program promotions.
  • Free on Demand or FOD
    This is broadcast and cable networks putting up their traditional TV shows. There are also networks that just exist On Demand. Almost all these programs contain advertising (a subject I have looked at in the past and will look at again).

So how do these translate into dollars and cents? The chart below shows consumer spending on these options in 2013 and 2014. I exclude OTT AVOD, SVOD and FOD as those do not require direct out-of-pocket payments from consumers, but gain revenue through advertising or as a by-product of the level of subscription a viewer has with the operator.

Consumer Spending 2013 vs. 2014 - On Demand

Over the Top Subscription Video on Demand (OTT SVOD) grew by 27 percent from 2013 to 2014 to over four billion dollars. Electronic Sell-Through (EST) grew by 31 percent to almost two billion dollars, Internet Video on Demand or iVOD grew by only 1 percent to almost one billion and Transactional on Demand (TOD) fell 15 percent to approximately one billion. In total, the paid On Demand marketplace went up 16 percent, growing to $7.5 billion in 2014 from $6.5 billion in 2013.

Another way to look at the same data is the share of spending as shown in the pie chart below. In 2014, the share of spending for OTT SVOD was 53 percent up from 49 percent. Clearly many consumers are streaming towards the shores of OTT subscriptions. However, as we mentioned in the last blog, “traditional” TV, while impacted, has only lost 4 percent of its overall viewership.

Share of Marketplace - On Demand 2014

One fun factoid to close this out: As every parent of a child knows, Disney’s “Frozen” was the number one most digitally purchased and rented movie last year.

A much more in-depth look can be found in Rentrak’s forthcoming “State of VOD: Trend Report.” For more information on that report please contact Rentrak’s OnDemand Client Services team at ode_clientservices@rentrak.com or 866.333.6212. (If you’re a Rentrak client, please reach out to your Account Manager.)

In case you don’t know, I am Bruce Goerlich, Chief Research Officer at Rentrak, the global standard in movie measurement and your TV Everywhere measurement and research company. I have been in the research end of the marketing business for more than 30 years primarily on the ad agency side, with my last stint prior to Rentrak in the role of President, Strategic Resources Zenith Optimedia North America. Somewhere along the way I morphed from young Turk to old fogey. Now that I have grey hair and am horizontally-challenged, I can speak with some authority on advertising and research issues – which I will do from time-to-time on this blog.

What’s Really Happening with TV Viewing? A Second Look at Its Strength

A blog or two back I looked at the “Stürm und Drang” (thunder and lightning for those of you not into German) about levels of TV viewing. I concluded that the situation was not as dire as the industry was saying. This blog takes a second look and again confirms the underlying strength of TV.

Because there are “lies, damn lies, and statistics,” I looked at the data in three ways. First, I show that there is power in strong original content. Second, I look at an analysis of Rentrak data by a financial analyst that shows the stability in overall TV reach. Finally, I zero in on the individual components of live and time-shifted viewing.

I started out with the original episodes of the 13 strongest Primetime shows for February of this year versus February of last year (when the programs aired) to which Rentrak had Video on Demand (VOD) reporting rights. Original episodes are important because reruns have much less time shifting. As the chart below shows, there was an 18 percent growth of viewing to these episodes year-over-year, driven not by live, but by all the permutations of DVR and VOD time shifting.

TV Viewership Chart

One may say that the Olympics skewed the results. But the growth was across all the networks we track, not just NBC’s competitors (NBC hosted the February Olympics). Note also that these are not weight averaged by duration, leading to some differences in the overall average.

TV Viewership Chart 2

For the second analysis, following T.S. Eliot’s adage that great artists never borrow, only steal, let me show you some data from Brian Wieser, CFA, a Senior Research Analyst at Pivotal Research Group (brian@pvtl.com). In a release analysis, he focused on the value of reach to advertisers, and in fact, how reach for the top 20 networks has not fundamentally changed in the past four years.

Brian looked at monthly average reach from Rentrak for the top 20 networks for live viewing.[1] I’ve put his numbers into graph format for ease of observation. The minimum reach of any of the top 20 went up from 34 to 39 percent. There was a slight drop in the maximum live reach level from 80 to 76 percent. But, the average reach went up by one percent to 50 percent this year from 49 percent four years ago. So, bottom line, there has been some slight shifting at the bottom and the top, but overall reach is staying the same.

TV Viewership Chart 3

Finally, I did my own analysis focusing on Rentrak’s total hours of live, DVR (up to 15 days) and Video on Demand (VOD) viewing levels for Sept. 2013 through Feb. 2014 compared to Sept. 2014 through Feb. 2015. Our live and DVR viewing is projected from approximately 15 million households and the VOD playback comes from 114 million TVs. The chart below shows what I found.

TV Viewing Chart 3

First, there seems to be an overall 4.1 percent decline in TV viewing across live, DVR and VOD playback from the major sources (234 billion hours season-to-date versus last year’s 244 billion hours). The big driver in the loss is the level of live viewing. Live is down by 9.6 percent (193 billion season-to-date versus 214 billion hours last year). However, live viewing still accounts for 83 percent of total viewing hours. The uptick is in time shifting. The combined increase in DVR and VOD watching was 35 percent (30 billion versus 40 billion hours).

What is missing from the chart is the amount of streamed viewing through connected devices. Rentrak does collect streaming information, but it is currently proprietary to participating clients and as yet not included in our syndicated product line. Importantly, our internal analyses confirm that, based on the programs we do track, audiences across multiple screens are generally “whole” year-over-year. These facts suggest that consumers are watching at least as much TV content as ever—albeit at different times and on different screens.

So, bottom line, what do we have with TV?

  • Strong original content continues to grab viewers.
  • Overall reach is stable
  • People are watching TV as much as ever, just differently
  • Program audiences become “whole” when other viewing options are included

The death of TV is greatly exaggerated.

[1] Rentrak’s total hours of live, DVR (up to 15 days) and VOD viewing levels for Sept. 2013 through Feb. 2014 compared to Sept. 2014 through Feb. 2015. Brian Wieser, “TV: Reaching to the Converted,” April 10, 2015.

In case you don’t know, I am Bruce Goerlich, Chief Research Officer at Rentrak, the global standard in movie measurement and your TV Everywhere measurement and research company. I have been in the research end of the marketing business for more than 30 years primarily on the ad agency side, with my last stint prior to Rentrak in the role of President, Strategic Resources Zenith Optimedia North America. Somewhere along the way I morphed from young Turk to old fogey. Now that I have grey hair and am horizontally-challenged, I can speak with some authority on advertising and research issues – which I will do from time-to-time on this blog.

The Winter of Our Discontent… But Not for Local News

It’s been a long winter for those of us in the Northeast, and as of the writing of this blog, it still isn’t over. But there are some people who should be dancing in the streets (okay, given the snow and ice, perhaps they should just walk briskly, but carefully). The happy people should be the local newscasters. Let’s take a look at Boston, which was really whacked by Jack Frost. The dark teal line in the graph below shows the average rating for all the broadcast Monday through Friday daily newscasts in the Boston local market from Jan. 2 through Feb. 19. The light orange line shows the inches of snow and rain Beantown received each day. It doesn’t take a statistician to see that when the snow comes down, the ratings go up. (The weather data can be found here.) Winter of Our Discontent Blog Image 1 A little bit of statistics shows that as the Sox fans continued to suffer (in terms of the weather, not the team), they started watching the news a bit more. The dotted line shows an underlying trend of increased news viewership. The increasing trend in viewership is statistically significant, though not strong. Winter of Our Discontent Blog Image 2 When I combined the overall trend of increased news viewing with the specific amounts of snow and precipitation, I got a very strong model that predicts how snowbound Bostonians turned to their local TV news to learn of the next horrors that were set to “rain down” on them. The model is shown below, with the model being the green line and the actual ratings the dark teal line. Winter of Our Discontent Blog Image 3 The news that local news is a strong “go-to” source is actually old news. I talked about it in an earlier blog on the weather’s impact on news during droughts: “Having a Heat Wave” So neither rain, nor snow, nor heat of day will keep the newscaster from his or her appointed rounds, and the viewers from watching local news.

In case you don’t know, I am Bruce Goerlich, Chief Research Officer at Rentrak, the global standard in movie measurement and your TV Everywhere measurement and research company. I have been in the research end of the marketing business for more than 30 years primarily on the ad agency side, with my last stint prior to Rentrak in the role of President, Strategic Resources Zenith Optimedia North America. Somewhere along the way I morphed from young Turk to old fogey. Now that I have grey hair and am horizontally-challenged, I can speak with some authority on advertising and research issues – which I will do from time-to-time on this blog.

It’s a bird! It’s a plane! No, it’s truly the Super Bowl!

Rentrak has been effectively tracking the Super Bowl for a number of years from millions of TVs projected to the U.S. population and it is interesting to see that the game is still so dynamic.

First off, spending has continued to rise over the past four years and will continue to this year. The chart below (with data from Kantar Media: www.kantarmedia.us) shows that the 2014 game produced more 14 percent more ad dollars than the previous year. Why was this so?

What drove the increase in total ad revenue for the 2014 game was the number of ad units sold as shown in the next chart. Even though the 2014 game with the Seattle Seahawks and the Denver Broncos was a blowout (43-8), and shorter in time (due to the fact that the 2013 Baltimore Ravens versus San Francisco 49ers had a 20-minute blackout the previous year), the network was able to sell 8 percent more paid ad time in 2014. The increase in the number of ads allowed the high growth in total ad revenue.

Percent Change Year over Year Super Bowl Ad Minutes

Of course, the real value to advertisers is the number (and quality) of eyeballs delivered by the Super Bowl. The overall audience is determined in part by the quality of the game, which was pretty good from 2011 through 2013. In 2011, the New Orleans Saints were in the championship for the first time. There was a lot of “heart” for them in the country after Hurricane Katrina. The game featured a Saints comeback as they pulled away in the last two minutes against Peyton Manning’s Colts. In 2012, there was the bitter rivalry and Super Bowl rematch between the Giants and Patriots, with a last-second New England “Hail Mary” pass falling incomplete. In 2013, the bi-coastal game of Baltimore versus San Francisco drew in more viewers with the help of an unforeseen “blackout” and eventual 49er comeback that fell short in the final minute. However, in 2014, the Super Bowl featured two Western teams with Seattle and Denver, as well as a 43-8 blowout that just wasn’t too compelling.

Rentrak Super Bowl HH Ratings

One thing all these games have in common is their power to deliver engaged audiences as indicated in the next chart. Rentrak has included commercial ratings since 2012 in our national TV service. When one looks at the commercial rating compared to the game’s rating, they are virtually the same. People like Super Bowl ads. They stay tuned in at a very high rate. In addition, people stay tuned to the game. Rentrak has a patent on a “Stickiness Index,” a measurement of program engagement that looks at how long people watch a program compared to other shows. The Super Bowl is about three times more likely to hold its audience. This is important because independent research has shown that the more of a program people watch, the more powerful the advertising’s impact is. Staying with a game means you are engaged with it and with the commercials. That is good for advertisers. 

Super Bowl 2011-2014

The 2014 game, even with the lack of excitement, still held both the commercial and the program audience throughout, as seen in the next chart. In fact, the rating delivery of a Super Bowl ad is directly tied to where it is in the game, not to audiences switching away when the ads are playing. As the game built in the first quarter, commercials were lower than the program average, but the game itself didn’t reach its peak. Once the peak was reached at about 7:30 p.m. Eastern time, ads from then on delivered higher ratings because of the overall audience level. At the very end of the game, there was a decline in overall audience, not just the commercial audience. 

Okay, I could prattle on about social media and the Super Bowl, and the attractive Advanced Demographics of the Super Bowl, but I can save that for another time. The evidence is clear, advertisers value the Super Bowl and the Super Bowl delivers value. Rentrak will provide a snapshot view of ad levels the day after this year’s Feb. 1 game.

By the way, I think this was a pretty good overview for a guy whose decisions in last year’s football championship pool were based on the style of each team’s uniform.

In case you don’t know, I am Bruce Goerlich, Chief Research Officer at Rentrak, the global standard in movie measurement and your TV Everywhere measurement and research company. I have been in the research end of the marketing business for more than 30 years primarily on the ad agency side, with my last stint prior to Rentrak in the role of President, Strategic Resources Zenith Optimedia North America. Somewhere along the way I morphed from young Turk to old fogey. Now that I have grey hair and am horizontally-challenged, I can speak with some authority on advertising and research issues – which I will do from time-to-time on this blog.

What’s really happening with TV viewing? People are watching great programs over 28 days.

A lot has been happening at Rentrak lately, but I wanted to take time to discuss an important subject.

The media and marketing trade press has been commenting recently on the decline in TV viewing, primarily based on sample-based data. One thing that has been missing in this conversation, I believe, is the element of time, e.g. viewing beyond three or even seven days, as well as viewing across multiple platforms. And what Rentrak is showing.

Rentrak has a way to look at what is happening in terms of time and key TV platforms. With our Multiscreen Essentials® (MSE) system, I could look at 33 common networks (see the list at the end of the blog), across third quarter 2013 and third quarter 2014. This service reports episode-level viewing for programs that were common across live TV, DVR playback for up to 15 days, and Video on Demand (VOD) viewing for up to 28 days. In both quarters, the number of episodes reported on was virtually identical (66.9 thousand vs. 67.5 thousand). A user can get episode-level detail—something that only Rentrak’s massive and passive database can provide.

The bottom line was that, for these shows (virtually all of which were primetime episodes), the total viewing was virtually unchanged. The chart below shows that the sum of the average household audiences was approximately 45 million for both years’ respective quarters.

Bruce Goerlich Blog Chart

Looking at the same data on a percent change basis year-to-year shows the same picture, but indicates the shift in viewership. Live is down, but the combination of DVR and VOD after three days is up, balancing out the total audience level.

Bruce Goerlich Blog Chart

Finally, it is clear that time-shifted TV viewers as well as DVR and VOD audiences, while still the minority, are growing as a percent of the total. The chart below, which demonstrates the share of viewership, shows that live viewing has dropped three percent from 2013 to 2014.

Bruce Goerlich Blog Chart

So, while MSE does not have all TV shows and networks in Prime, it is clear that consumers, when given the opportunity, will find their favorite shows and watch them. To say that ad-supported TV is declining without looking at viewership across time and major platforms misses the reality of America’s continued love affair with the tube.

List of Networks in MSE Report

ABC
ABC Family Channel
Adult Swim
American Movie Classics
BBC America
BET: Black Entertainment Television
Bravo
Cartoon Network
CBS
CMT: Country Music Television
CNN
Comedy Central
E! – Entertainment Television
FOX
FX Network
FXX
Hallmark
Logo
MTV: Music Television
MTV2
National Geographic Channel
National Geographic Wild
NBC
Oxygen
Spike TV
Syfy
TBS: Turner Broadcasting System
TNT: Turner Network Television
truTV
TV Land
USA
VH1
Women’s Entertainment Network

In case you don’t know, I am Bruce Goerlich, Chief Research Officer at Rentrak, the global standard in movie measurement and your TV Everywhere measurement and research company. I have been in the research end of the marketing business for more than 30 years primarily on the ad agency side, with my last stint prior to Rentrak in the role of President, Strategic Resources Zenith Optimedia North America. Somewhere along the way I morphed from young Turk to old fogey. Now that I have grey hair and am horizontally-challenged, I can speak with some authority on advertising and research issues – which I will do from time-to-time on this blog.

TV Engagement at the Local Market Level

How local TV used to be measured in the United States reminds me of the iconic fairy tale Cinderella. There was a wicked stepmother who treated her own daughters well, but Cindy got the shaft (or at least the broom). Local TV used to just be a hodge-podge of small samples, a mixture of varying methods of differing quality, which produced differing results, bouncing numbers, and many, many markets with hardly any clothes—I mean, rating information—at all.

Well, in real life, like the fairy tale, there is a Prince Charming to rescue the fair maiden. [1] Rentrak’s massive and passive measurement will soon include 60 million TVs and 26 million homes. That will be about one in four households. Our approach is the same in each market—365 days a year, 24 hours a day.

One great thing we are able to do is provide metrics that have traditionally been just the province of national TV—like engagement, or what we call “stickiness.” As noted in previous blogs, Rentrak’s measure compares the average percentage of a program or series viewed to the average of programs of the same duration to create a comparable metric across programs of different lengths. (It is easier to watch 50 percent of a 30-minute show than a 60-minute show.) Average percent viewed has been validated as being directly correlated to advertising effectiveness from work done at the media agency Zenith.

An example is below from an actual market with actual TV shows. This shows the straightforward rating (vertical axis), and average percent viewed (horizontal axis). For clarity, news programs are green diamonds, game shows are blue boxes, sitcoms are purple circles, and gossip shows are orange triangles.

Bruce's Blog Charts – September-01

Looking at programs this way gives leverage points to all sides. The station airing the 10 p.m. news can say, “My ratings aren’t the highest, but I have a high average percent viewed.” The agency can say to the station airing the third 10 p.m. news show, “You have high ratings, but your audience isn’t very engaged.” However, the “fairest way in the land” to look at the shows, is to employ Rentrak’s Stickiness Index—or TV engagement metric—as mentioned above. The chart below takes the same programs, indexes the ratings to the average of the selected shows, and applies the duration-based Stickiness Index.

Bruce's Blog Charts – September-02

There is not a lot of movement in the upper-right quadrant of higher ratings and higher engagement except celebrity news slips a little bit in terms of Stickiness value. The big news is the shift into the high Stickiness, lower rating quadrant of two news shows and a game show. This is because, compared to other shows of the same duration, they have a lot of engaged viewers.

I’ll be glad to share the actual data with any Rentrak client. And yes, these charts are produced along with a spreadsheet in Rentrak’s local system—though they have “been put in a prettier dress” for the ball.

Not a fairy tale and a happy ending!

In case you don’t know, I am Bruce Goerlich, Chief Research Officer at Rentrak, the global standard in movie measurement and your TV Everywhere measurement and research company. I have been in the research end of the marketing business for more than 30 years primarily on the ad agency side, with my last stint prior to Rentrak in the role of President, Strategic Resources Zenith Optimedia North America. Somewhere along the way I morphed from young Turk to old fogey. Now that I have grey hair and am horizontally-challenged, I can speak with some authority on advertising and research issues – which I will do from time-to-time on this blog.

[1] I’m not talking about Rentrak’s EVP of Local Television, Steve Walsh—though he could play the part.