CBS Sees $5B Market Coming

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Los Angeles— Focus-group research may provide clues as to why CBS is making encores of CSI: Crime Scene Investigation available via video on demand.

On-demand replays of primetime fare could generate some $5 billion annually for networks, according to a study conducted by CBS.

The data, culled from interviews with viewers at parent Viacom Inc.’s consumer-research center in Las Vegas, also suggests that the use of digital video recorders actually helps build ratings for top broadcast shows and will not diminish the power of advertising to the extent predicted by pundits, said David Poltrack, CBS’s executive vice president of research and planning.

Poltrack outlined some of the network’s research at a conference staged by EPM Communications Inc. here last week, examining on-demand marketing strategies. Coincidentally, the presentation was scheduled the day after CBS announced a deal making select primetime product available via Comcast Corp.’s VOD platform, with consumers paying 99 cents per episode and commercials included.

The $5 billion estimate is based on research, both with a panel of TV viewers, and with multiple focus groups assembled at a consumer research center that Viacom operates in the MGM Grand Hotel in Las Vegas. Consumer attitudes were tested on a $1 price point, which would allow viewers the functionality to fast-forward through commercials; or a 50-cent charge to watch the show the next day with spots.

The focus groups, featuring adults from 33 states, were evenly split on the $1 vs. 50-cent price point, Poltrack related.

The panel comprised 2457 respondents, 44% of whom had VOD access. Of those, 21% had ordered movies. Sixty percent of panel respondents said they would be definitely to somewhat likely to rent primetime reruns at $1 a program. Only 14% said they were definitely uninterested.

Most were interested in broadcast hits such as CBS’s CSI, or ABC’s Desperate Housewives. Of those, 62% said they’d pay the higher price to zoom through commercials, while 38% preferred saving money by watching the spots.

Respondents also expressed interest in purchasing cable fare like The Sopranos, Deadwood, The Daily Show With Jon Stewart, Trading Spaces and Nip/Tuck, as well as weekly roundups of Late Night With David Letterman and The Oprah Winfrey Show.

Based on the different panels, and their expressed intent to buy, Poltrack extrapolated the $5 billion figure, a total reflective of annual per-household outlays of $100 within a 50 million home VOD-enabled universe.

Related research demonstrates that DVR usage is not damaging, but rather enhances primetime viewership, as homes with those devices view 12% more of fare from that daypart when allowed to time-shift.

CBS conducted next-day viewership studies and although 64% of viewers said they fast-forward through all commercials, 21% could still recall one or two spots they speeded past, Poltrack said.

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