DVR Commercial Skipping Could Threaten $8 Billion in TV Advertising

JupiterResearch: 53 percent of online Digital Video Recorder (DVR) subscribers used their DVRs to skip commercials. If these DVR households skip commercials 100 percent of the time, the cable and broadcast TV advertising revenue potentially at risk in 2006 would be $8 billion of the $74 billion TV advertising market.

DVR users who skipped commercials report watching an average of 18 hours of television per week - not significantly more than viewed in non-DVR homes.

Claims that DVRs tend to increase television viewing are not true across the board. Only for those homes that record and watch a show the same day or week does DVR use boost overall TV watching, from 17 hours a week for non-DVR homes to 20 hours a week.

JupiterResearch recommends that television networks and advertisers rethink programming and advertising strategies to cope with how DVRs are being used.

Current efforts by certain networks to charge for prime-time reruns via DVR technology do little to boost revenue and almost serve to penalize DVR users who forgot to properly program their unit. The $8 billion segment of cable and broadband TV advertising revenues potentially at risk due to DVR commercial skipping is not a foregone conclusion, but reworking ads to leverage the unique DVR experience could open new avenues of creativity and relationships with viewers. The DVR Dilemma: Managing Consumer Behavior Publ 230060504