Marketing

Nielsen: On Demand Users Are Heavy TV Viewers

3/03/2006 7:00 PM Eastern

Video-on-demand viewing does not cut into traditional television viewing, according to a joint research report from Nielsen Media Research and Comcast Corp. In fact, there’s a direct correlation between heavy TV viewership and heavy on-demand usage.

The results, said Page Thompson, vice president of on demand for Comcast, are important because they put to rest fears that heavy on-demand usage cuts into traditional TV viewing.

“In the past, we’ve always said we’ve never seen any cannibalization of linear rating based on usage of on demand,” Thompson said, based on some internal studies by Comcast. “We’ve never had a third party look at the actual usage data in households and confirm on demand does not cannibalize linear ratings until now. On-demand heavy users are extremely heavy users of linear TV.”

The message to programmers, according to Thompson: “This is further proof that on demand can be a great marketing and promotional tool for networks. On demand is a valuable way to expose additional people to their content.”

Nielsen examined on-demand usage in roughly 150 Comcast digital homes from June 1 through August 31 last summer. On-demand homes watched an average of 69 minutes of VOD each day during that period, said Scott Brown, Nielsen senior vice president of strategic relationships, markets and technology. Those homes watched 723 minutes of regular TV each day. Both viewing tabulations covered second and third TV sets in each home.

Conversely, non-on-demand homes watched between 500 and 550 minutes of TV each day. “VOD users are the heaviest users of linear TV,” Brown said.

The top 20% of on-demand users accounted for 65.9% of all on-demand viewing, 1,228 minutes per month. The next quintile of VOD users accounted for 23.5% of all viewing, or 432 minutes per month, he said.

Brown believes cable has the ability to turn those lighter users into heavy users with better content. “It’s your area of opportunity,” he said.

Comcast is now showing CBS shows CSI: Crime Scene Investigation and Survivor on demand, which Brown believes is an example of programming that could turn light users into more regular users.

The survey examined television and on-demand viewing in local people meter homes in Philadelphia.

The Nielsen sample consisted of 144 homes in June, 158 homes in July and 166 homes in August. Over the three-month period, 75% of homes accessed on-demand programming at least once.

Highest on-demand use was found among younger audiences, the under-12 and 18-34 demographics, Brown said. While those under 12 represented 14% of the sample homes in the test, they accounted for 19% of all on-demand viewing. The 18-34 demographic accounted for 21% of all sample homes, but 32% of all on-demand usage.

Comcast plans further on-demand measurements with Nielsen. “It’s one more way we’ll get great VOD data,” Thompson said.

On-demand options are cropping up online and with portable devices like Apple Computer Inc.’s iPod. But Thompson is not necessarily concerned, saying, “Where you want VOD is on the TV set. You can watch a program on demand and go immediately to the linear network.”

Thompson concedes the emerging platforms provide a promotional value for programmers, but said on demand can help those same programmers drive eyeballs to their linear channels, resulting in increased ratings and advertising revenue.

Nielsen’s Brown said the company is rolling out a newer version of its people meter, capable of recording television viewing on digital video recorders and on demand later this year.

The company’s current people meter can tell if a TV is tuned to an on-demand stream, but can’t tell which program is being watched. Brown expects to have those new DVR/VOD people meters in over 3,000 homes by year end. Those new people meters will be able to detect audio codes in on-demand programs to record what programs are being watched.

Brown said Nielsen won’t be able to calibrate the use of trick mode features, such as fast forwarding, per se, but the people meters do give advertisers a minute-by-minute breakdown of viewing data. “You can see when the audience dips [if a commercial is skipped], so the industry is getting a sense of that,” he said. And, he points out, not all ads in on-demand programming can be skipped.

Brown also said Nielsen is looking to get those new people meters into markets where Time Warner Cable has launched its Start Over service.

March