That's the opinion of most everyone affected by Nielsen's plan to track DVR usage. The debate over how to count time-shifted viewing promises to be the central issue in this year's upfront negotiations.
Individual broadcast networks haven't officially issued a stance saying advertisers should pay for time-shifted viewers, but they certainly laid the grounds for such an argument last week when, in a rare unilateral move, the research heads for the six networks presented research debunking commonly held theories about DVR use. Agencies, however, remain unswayed.
"I cannot remember a situation where so many pundits and forecasters and analysts have been so wrong for so long," said David Poltrack, CBS's exec VP-research and planning. "DVRs will enhance, increase viewership of network TV programs and will increase exposure to advertising within those programs."
According to Mr. Poltrack, even when consumers fast-forward through commercials, there's still an ad impression. In fact, he said, commercial recall between a DVR user and live TV viewer is not all that different and, in fact, 88% correlated.
Many agencies, however, don't share that view.
"This is a pure attempt to increase revenue at the expense of advertisers," said Jason Maltby, president and co-executive director of national broadcast at MindShare. "Right now the currency doesn't include [time-shifted viewing] and to add it in says the networks want us to pay more for the same thing we're getting right now."
Some agencies would like to get ratings at a commercial-by-commercial level to see what happens to viewing during the ad breaks in both time-shifted and live viewing. In the absence of commercial ratings, they'll use live data.
"At the end of the day our advertisers are interested in paying for the bits between the programs, not the averages of the programs themselves," said Jim Kite, MediaVest's exec VP-director of insights, research and accountability, whose initial studies indicate DVR users skip ads 70% to 90% of the time. MediaVest is buying Nielsen's minute-by-minute data to try to get closer to commercial viewing data.
Media agencies are generally split into three camps on the issue. Some have decided to only accept live ratings. Others haven't issued a formal stance and could choose to negotiate differently client by client. Still others remain deeply troubled by the fact Nielsen includes VCR recording as live viewing, and say they would consider including time-shifted viewing if VCR recording was no longer counted as live viewing.
To be sure, the initial impact of Nielsen's time-shifted viewing is small. DVR penetration is around 8% and the percent of TV viewing that's time-shifted is much lower when passively measured than when self reported, said Alan Wurtzel, NBC's president-research. In Arbitron's portable people meter trial in Houston, for example, DVR households only time-shifted 9% of their TV time as opposed to the previous self-reported estimates of 30% to 40%. Yet a resolution will certainly have to come to head by the upfront selling season and probably sooner.
Ultimately, many believe the DVR issue is a transitional one, a steppingstone to an on-demand world.
In the meantime, said Bill Morningstar, exec VP-ad sales at The WB, "We're going to keep working with our partners to find the fair compromise."