DVR numbers increase ratings

All television networks gauge their show’s popularity through a system of ratings. Prime-time ratings are important because advertisers pay a premium to buy time to pitch products during a show — you know, commercials. The United States uses a system founded by Arthur Nielsen, who began analyzing brand advertising first in radio and then in television.

As technology began changing, however, so did the way people could watch television. Now instead of staying up late to watch a show, viewers can download it, stream it using a company such as Hulu, or even digital-video-record (DVR) it.

DVR lets users record video in a digital format either on their cable box, through application software for their computer, or even on a flash drive. DVR adoption has rapidly accelerated in recent years. In 2006, when it was first released, Nielsen found 1.2 percent of U.S. households had a DVR. Flash-forward to now — that number has grown to almost 43 percent.

For prime-time shows that depend on these numbers for major sources of revenues, it has become problematic figuring out how to incorporate these DVR numbers into their Nielsen recordings.

Back in May of 2012, the chairman of NBC Broadcasting, Ted Harbert, asked the television industry to rethink its rating measurements. “Our ecosystem spreads more than $20 billion around the broadcast networks. For it to stay healthy for another 65 years, every constituency represented here today has to do their part,” said Harbert. “Just because technology gives you the ability to do something, does that mean you should? Not always.”

In the past few months, The Nielsen Company has worked hard to incorporate the DVR recordings into its prime-time ratings. Now what many consumers don’t know about their DVRs is that, in addition to getting scheduling information and the ability to tape shows, the Nielsen Company can now pull data from the boxes, helping them figure out what you’re watching and when.

Many prime-time shows have seen significant ratings increases when this additional analysis has been factored in. For example, take a new show on NBC called Grimm. When the show first started, it saw a decent level of ratings, which made it a mild success. When the DVR numbers were collected, its ratings grew an additional 81 percent.

This has happened for all of the networks with shows like Parenthood, New Girl, How I Met Your Mother, Survivor, and Grey’s Anatomy. All popular shows saw at least a 30 percent increase in ratings when DVR numbers were added in.

Now Nielsen offers multiple measuring sticks for ratings, including live events, DVR, and streaming videos. By allowing these additional variables to be added into the ratings, prime-time networks will continue to see their revenues increase, with advertisers ready and waiting to buy air time.