DVRs were supposed to undermine television. They have done the opposite
TEN years ago this week a black box was demonstrated at a broadcasters’ convention in Las Vegas. TiVo’s digital video recorder (DVR) was expensive: the cheapest model cost $499. But it was hailed as revolutionary. It was much more flexible and easier to programme than a videocassette recorder. It allowed people to record and play back at the same time, so they could start watching a programme 20 minutes after it had started and fast-forward through all the advertisements. Experts forecast a severe, perhaps fatal, blow to advertising-supported television.
“For quite a few years people thought it was going to mean the demise of the television business,” says Alan Wurtzel, president of research at NBC, an American broadcast network. Yet DVRs turn out to have done little damage. Indeed, DVRs (also known as personal video recorders, or PVRs) may even have protected television and made it more conservative.
On one point the Cassandras were correct. As prices fell and cable and satellite firms began to bundle DVRs with other services, their popularity soared. According to Nielsen, a media-research outfit, 29% of American homes now have one. The boxes are in a higher proportion of the households advertisers most care about. Jack Wakshlag of Turner Broadcasting, a cable company, calculates that DVR-owning households earn about $20,000 more than average. Yet those households do not use them nearly as much as one might expect. Families with DVRs seem to spend 15-20% of their viewing time watching pre-recorded shows, and skip only about half of all advertisements. This means only about 5% of television is time-shifted and less than 3% of all advertisements are skipped. Mitigating that loss, people with DVRs watch more television.
Just because technology enables people to do something does not mean they will, particularly when it comes to a medium as indolence-inducing as television. And people have become lazier. Early adopters of DVRs used them a lot—not surprisingly, since they paid so much for them. Later adopters use them much less (about two-thirds less, according to a recent study). David Poltrack, head of research and planning at CBS, another broadcast network, reckons the networks have already felt most of the DVR’s effects.
Advertisers and television networks have pushed back even against this puny threat. They have developed relatively static advertisements that get a message across even at high speed. They put snippets of programming in the middle of ad breaks. One trick, described by Todd Juenger of TiVo as “closer to a silver bullet”, is to run advertisements that resemble programmes—in some cases featuring stars from the show people are trying to watch.
Far from being revolutionary, in some ways DVR has made television more stable. With the exception of live events it is broadly true that the most popular programmes are recorded the most. Mr Wakshlag describes it as “a hit-saving machine”. Broadcast television receives a bigger boost from DVR playback than cable television. The device has made it harder to introduce a new television programme, particularly at 10pm when people are likely to be playing back shows they recorded at 8pm or 9pm.
One reason television executives have calmed down about DVRs is that they have something else to worry about. Hulu and other video-streaming websites, which are becoming more popular, give a great deal of control to consumers and are thought to pose a threat to advertising-supported television. Does that sound familiar?