MAGNA GLOBAL Flash POV: TiVo Study Ignores Realities of TV Buying

A study released by TiVo/TRA yesterday and picked up by MediaPost and Adweek attempts to quantify the money lost by the major networks because we use only three days of playback in the ratings currency instead of seven.  They did so by examining the ten primetime series with the most “season pass” requests among their subscribers, and calculating the increase in viewing between days four and seven.  Then, they applied average unit costs from SQAD and multiplied it out to calculate the amount of lost income over the course of a season (in this case, the 2012-13 season).

While it certainly makes for some eye-catching headlines, there are a number of issues with their approach:

1.       The TiVo sample is not representative of the U.S.

2.      TiVo owners are more aggressive time-shifters than the average DVR user.

3.      Activating a season pass implies that the show will be viewed exclusively in playback—ignoring a sizeable portion of the audience that actually views live.

4.      In most cases, a season pass means that only first-run episodes will be viewed, which does not reflect the reality of how TV buys are structured.

5.      TiVo ratings are not the currency.

The chart below illustrates the difference between the C3 (average commercial minute ratings with three days of playback) and C7 (seven days of playback) published by TiVo, and compares it to current season numbers from Nielsen for the same series.  Even excluding repeats, the Nielsen increases are significantly lower.

Bottom Line: The networks will very likely cite this study as justification for a move to C7 during the upfront, but it ignores both the actual trading currency and the work done at the negotiating table.  In the end, it’s little more than interesting headlines.

C4-C7 Percent Increases

Network Program TiVo % Increase    Nielsen % Increase, No Repeats Nielsen % Increase, All Airings
CBS BIG BANG THEORY, THE 8.1% 2.7% 2.0%
ABC MODERN FAMILY 10.9% 4.7% 3.5%
ABC GREY’S ANATOMY 8.0% 3.1% 3.1%
CBS NCIS 8.8% 2.6% 1.9%
CBS MENTALIST, THE 9.6% 3.2% 3.5%
ABC CASTLE 10.0% 4.2% 3.0%
CBS ELEMENTARY 8.8% 3.0% 3.3%
FOX AMERICAN IDOL 4.1% 1.6% 1.6%
CBS GOOD WIFE, THE 6.2% 1.6% 3.3%
AVERAGE 8.2% 3.2% 2.9%

Sources: TiVo published figures, 2012-13 season, Nielsen 9/23/13-4/06/14