Live audiences have been shrinking for years, and one cause of the precipitous drop in live TV audiences is the growth of DVR usage among TV viewers. That’s due in part to wider adoption of DVRs; now about 40 percent of U.S. households have DVRs, according to Leichtman Research Group. That’s up from just 8 percent just five years ago, and 27 percent two years ago. Not only that, but a full third of those DVR-wielding homes have more than one set-top box with time-shifting capabilities. That means a lot of the TV that used to be watched live is now being recorded and watched later.
What effect does that have on TV ratings? According to a report in the NY Times, approximately 15 to 20 percent of all TV viewing is now happening on the DVR. ABC’s (s DIS) hit comedy Modern Family, for example, received a 5.1 Nielsen rating, but with the addition of DVRed viewing that rating jumped to a 6.1 in the first three days after the show premiered. Meanwhile, Fox’s (s NWS) House received a 4.2 rating, which grew to 5.1 when DVRs were counted.
The findings show that viewers are becoming increasingly comfortable with getting their content on-demand rather than watching a live broadcast. And while networks are now able to measure that viewership and show it as part of a larger overall audience, the ratings of recorded shows are of little value in attracting advertisers, since many viewers fast-forward through commercial breaks.
Most importantly, it shows that TV programming is becoming less about putting the right show in the right time slot, and more about picking shows that viewers want to watch. In an on-demand world, viewers are less likely to choose to watch a show simply because it’s on TV; more often than not, they’re going to choose to record it (or not) and watch it later.
The one exception to this is live content. According to the NY Times, the show which was least affected by DVR viewing was ABC’s Dancing with the Stars, which grew only 5 percent when adding in DVR’d viewing, from a 5.1 rating to a 5.3. That’s one reason why shows like Dancing With the Stars and live sporting events are so important to broadcast networks; as fodder for next-day water cooler chit-chat, they can’t really be viewed on demand whenever a users wants to watch them.
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