NBC Study Includes Surprises; Draws Sharp Questions from Media Buyers

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NEW YORK ( -- NBC Universal used its program-development meeting today with ad agency executives to push its side of the DVR ad-skipping debate. Remarkably, the broadcast network's position seems to boil down to this: Households without digital video recorders are skipping more ads than those that use DVRs.

Alan Wurtzel, president of NBC Universal Television Research and Media Development, presented the findings.
7% drop in non-DVR homes
Alan Wurtzel, president of NBC Universal Television Research and Media Development, told agencies his research reveals the impact of ad skipping in households with DVRs is much less than one would expect. According to his analysis of Nielsen Media Research data, the drop in commercial effectiveness in DVR households is less than 3%. Mr. Wurtzel said that the same analysis of non-DVR households found a drop of 7%.

"This DVR thing has gotten everyone crazy," Mr. Wurtzel said, speaking to Advertising Age after the presentation. "We need to apply some perspective. We're not arguing it isn't going to affect it, but we have time to figure it out" in order to judge the extent of the issue.

Mr. Wurtzel's presentation, however, left some media buyers in the audience scratching their heads. If non-DVR households have been ad skipping to a much greater extent all along, why have agencies been paying for ads? "I'm reluctant to fuel the fire on this. The research was interesting, but it begs a lot of questions," said Larry Blasius, director of negotiations, Magna Global, who saw the presentation.

"We're not saying that people who use DVRs don't skip commercials," Mr. Wurtzel said in a statement released by NBC. "What we are saying is that we've been living with commercial skipping from day one, and yet television remains the most powerful and effective marketing and sales medium ever known.

The whole DVR debate has become something of a cause celebre for agencies and networks leading up to the upfront negotiations in May. The issue first arose when Nielsen began reporting separate streams of ratings data in December that recorded not only households viewing TV programs at the time they air, or "live," but also those playing the shows back via DVRs the next day and those playing the shows back within seven days.

Unified front
NBC joined the other broadcast networks in a December presentation that explained why they felt the impact of DVRs was being overplayed. Research by the six broadcast networks on DVR penetration found that households with a DVR increase TV viewing by an average of 12%. Mr. Wurtzel's recent research found that despite an increase in video on demand, broadband and replay devices, traditional viewing habits remain pretty much intact, with the average U.S. household watching about 15 channels regularly.

Media agencies have argued that they're not willing to pay networks for anything but live ratings, arguing that additional playback by viewers bypasses their advertising. Mr. Wurtzel argued that viewers who actually pause and actively watch commercials are treated by Nielsen as viewing in "playback" rather than "live."

Around 10% of U.S. households have a DVR, a figure that is expected to rise to 35% by 2009-10, according to NBC Universal projections. According to Nielsen Media Research, 12% of U.S. households have a DVR, and Nielsen expects that to increase to 18% by the end of the year.

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