A report suggests that over half of digital video recorders users surveyed say they skip commercials, which could risk $8billion dollars in television advertising revenue in America.
An online survey by JupiterResearch found that 53 per cent of digital video recorder users skipped television adverts. If they did this all the time, the report concludes it could risk $8billion of the $74 billion television advertising market in United States.
The report, The DVR Dilemma: Managing Consumer Behavior, also found that those that skipped commercials did not watch significantly more television than other viewers.
The findings of the report, which was admittedly based on a limited online survey, are consistent with anecdotal evidence from users of digital video recorders, many of whom say that they simply do not watch television advertisements any more. In practice, they probably still see some commercials, but the erosion in the value of such advertising in reaching these viewers is significant.
David Schatsky, president of JupiterKagan Research, said the revenues at risk were not a foregone conclusion, but “reworking ads to leverage the unique DVR experience could open new avenues of creativity and relationships with viewers.”
However, if viewers are motivated to skip adverts, reaching them in the first place is likely to be a challenge.
In the UK, nearly a fifth of satellite television homes now have Sky+ digital video recorders. If they are not watching as many commercials the value of television advertising will ultimately be affected. Subscription has already overtaken advertising as the primary form of revenue.
The impact of the digital video recorder and the corresponding effect on the value of the 30-second spot are often overstated but cannot be ignored. It is simply the latest in a series of innovations, from the remote control to the video cassette recorder, that have been seen as the end of television advertising as we know it.
In the long term, targeted, contextually relevant messages, rather than irritatingly intrusive advertisements, are likely to be more effective.