Thursday, November 15, 2012

DVR: Three Days vs. Seven Days

We know that networks love to tout huge DVRing gains from Live + Same Day to Live + three days after the airdate. We also know that networks love to tout huger gains from Live+SD to Live + seven days. And finally, we know that (frustratingly for the networks) all those gains do not end up translating to huge gains in the actual money numbers, the ratings for commercials within three days (C3).

Facing a bad year pretty much any way you realistically slice it, the networks have turned their public attentions to new frontiers, a faraway land where the numbers aren't so bleak. Namely, they want more DVR viewing counted. They want a switch from C3 to C7, or commercial viewing within seven days. As Cynthia Littleton notes in that article, they hold big presentations at the upfronts about the pressing need for this switch. And they sure seem to love to talk to people who want to write articles about huge +7 DVR gains.

However, the number that matters in this argument is not huge gains relative to Same Day numbers. It's about the difference between C3 and C7, and pretty much nobody ever talks about what those numbers really are. Some may even look at it like, "Seven days vs. three days! That's more than twice as long an opportunity to view, thus more than twice as much viewing!"

So what's the C3 -> C7 difference really like? We can't know for sure, since C7 is unseen in public settings. But what we can look at is the Live+3 -> Live+7 difference in program ratings. If the switch to seven days is such a big deal, there should at the very least be big bumps from three to seven there.

Unfortunately, as is usually the case when we drill down into DVR ratings, the reality is underwhelming, especially relative to the amount of press.

Here are the 20 shows for which I could find L+3 numbers from premiere week:

L+SD L+3 L+7 3->7 Relative 3->7 Absolute 3->7/S->7
Modern Family 5.5 7.3 7.8 7% 0.5 22%
The Big Bang Theory 5.0 6.5 6.9 6% 0.4 21%
Grey's Anatomy 4.4 5.7 5.9 4% 0.2 13%
Revolution 3.4 5.2 5.7 10% 0.5 22%
Once Upon a Time 3.9 5.0 5.3 6% 0.3 21%
2 Broke Girls 3.7 4.6 4.8 4% 0.2 18%
Elementary 3.1 4.2 4.5 7% 0.3 21%
Revenge 3.2 4.1 4.3 5% 0.2 18%
Criminal Minds 3.1 4.0 4.3 8% 0.3 25%
New Girl 8pm 2.8 3.8 4.3 13% 0.5 33%
New Girl 9pm 2.8 3.8 4.2 11% 0.4 29%
Person of Interest 2.9 3.8 4.1 8% 0.3 25%
Last Resort 2.2 3.0 3.2 7% 0.2 20%
666 Park Ave 2.1 2.9 3.2 10% 0.3 27%
Private Practice 1.9 2.8 3.1 11% 0.3 25%
Scandal 2.1 2.8 3.0 7% 0.2 22%
The New Normal 2.0 2.8 3.0 7% 0.2 20%
Grimm 1.6 2.7 2.9 7% 0.2 15%
Hawaii Five-0 1.8 2.6 2.9 12% 0.3 27%
Fringe 1.1 1.7 1.8 6% 0.1 14%

Moral of the story: while Same Day -> +3 can be huge and Same Day -> +7 can be huge, the real metric behind the push for counting seven days, +3 -> +7, is pretty much never huge. No show got more than a 13% bump from +3 to +7, and no show got an absolute bump of more than 0.5 points. The averages among these 20 shows were a 7.4% relative bump and a 0.3 absolute bump. Best case scenario, only a third of the bump from Same Day to +7 takes place after day three. On average, just 22% of the Same Day -> +7 bump takes place after day three. In other words, the vast majority of DVRing beyond same day but within seven days is already counted.

7.4% and 0.3 don't seem like that big a deal, and that's before I point out these three obvious holes in those averages:

1. Due to availability, this sample is way skewed toward heavily-DVRed shows. These 20 shows are those heavily-DVRed enough to make it into press releases. Shows that skew much more toward live viewing will be less DVRed at each stage of the game, meaning the bump from +3 to +7 across the whole primetime landscape will be smaller.

2. The L+3 -> L+7 bump is almost certainly larger than the "real" bump from C3 -> C7. The absolute bump is obviously smaller if any commercials are skipped on days 4-7. And to grant them that 7.4% relative bump in this transition, you have to assume that commercials are viewed at the same rate on days 4-7 as on days 0-3. All the live viewing on day zero makes that... not the case.

3. Even if the networks get C7 counted, it won't be a "perfect" count. As Littleton notes in the Variety piece linked up top, many ads are highly time-sensitive and are much less useful (or even worthless) beyond the three-day window. Many don't have that problem, but they'd have to meet somewhere in the middle, at a price lower per demo point than what C3 gets.

This is a somewhat wild conjecture, but factor in those three things and it seems that all this talk about the C3 -> C7 transition ultimately wouldn't effectively bump up the numbers by more than 0.1 on average, maybe toward 0.2 for the biggest shows. To use a massive oversimplification, if you just give the whole schedule another tenth of a point (using our $/demo point from the ad rates piece), that's another $5,300ish per ad. Sure, that really adds up across an entire season, but it's hard to imagine that it's the game-changer the networks want us to believe it is. Could a massively DVRed show finance the license fee for one full episode per 22-episode season with the extra C7 money? Maybe, but I'm leaning no.

The conclusion? I lack the numbers it would take to truly pinpoint the impact of a hypothetical C3 -> C7 transition. I actually think my conjecture above is being kind to the networks, but who knows. What we do know is that these numbers look pretty underwhelming relative to what the networks are saying about them. And the numbers I lack would make the C7 bump look even worse.

So at least for now, the talk about C7 is much more about perception than about real money. The thesis of this post is not that a C7 transition would be meaningless or that the networks shouldn't fight for it. After all, the practice of DVRing is going nowhere but up, so these numbers will get bigger. What I'm saying is it's close enough to meaningless that it's not worth worrying about from the outsider perspective. It's not going to save the TV industry, it's not going to erase the networks' problems this fall, and it's not going to affect the relative landscape. If perception didn't exist, the resources used to make this case would probably be better spent on developing better shows and getting revenue that way. But perception does exist. People have an innate desire to be counted and an innate aversion to an increasingly dreary Live + SD ratings picture, and this movement gets a disproportionate amount of press because it plays heavily on both of those things.


Spot said...

Thanks for assembling those numbers.

I do agree that your show sample is likely very highly DVR'd vs. the whole of broadcast primetime, considering it contains no sports, nor reality, nor repeats, none of which has much DVR viewing past the +Same Day period and yet they make up a noticeable share of all broadcast primetime.

The few times we have seen C+Same Day > C+3 ratings, those increases are tiny, so I agree that the C+3 to C+7 increases are almost certainly tiny too.

Spot said...

In June MediaPost had blog post about this, "Proposed C7 Currency Switch Could Have Minor Impact." It stated:
For prime time in the 2011-12 season through May, the networks on
average would each have gained 3% in sellable viewership in the 18-to-49

Here's link if you're interested:"

Spot said...

Thanks! So it looks like my average 0.1 conjecture was in the general vicinity even before any adjustment in pricing.

Spot said...

Thanks Bill. Yes, if Same Day -> 3 is tiny, then one would expect 3 -> 7 to be VERY tiny based on those relative bumps in the program ratings.

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