Cable's DVR Winners and Losers

The digital video recorder is creating winners and losers among television networks, according to a new report by Michael Nathanson of Bernstein Research.
In a  note released Wednesday, Nathanson says about half of the wealthiest and best educated households in American have the time-shifting, commercial-killing devices.
“These trends are clearly bad news for network aimed at the affluent demos, while inconsequential for other,” Nathanson says, noting that overall live viewing fell 4% during the 2008-09 television season.
With DVRs taking the biggest live-viewing bite out of broadcast channels some, but not all, cable networks have benefited.
Networks featuring live news and sports like Disney’s ESPN and Time Warner’s CNN have gained share of total viewers, Nathanson said. On the other hand, Viacom’s MTV, VH1 and BET have been hurt by minimal DVR playback and high levels of commercial skipping. (The analyst recommends Viacom re-invent in higher-quality content or rethink its brand to widen their appeal.) Other channels affected by low DVR playback and high commercial avoidance include HIstory, truTV, ABC and E!
Ad dollars are also moving to cable, particularly the big general entertainment networks such as TNT, TBS and FX that advertisers view as “broadcast substitutes,” Nathanson says. Of course as these networks rely more heavily on original shows, they risk being hurt by DVRs, just as their broadcast competitors are right now. (Indeed, TiVo says that Emmy-nominate shows such as “Mad Men,” “Weeds” and “The Daily Shows” are time shifted more often than the average for programs in their categories, according to a story in the Hollywood Reporter.)

Until then, Nathanson says, original programming is a winner for cable because they attract ad rates that are 50% to 100% higher than re-runs of shows that originally aired on broadcast.