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Until now, Nielsen was not able to track the TV viewing habits of DVR (digital video recorder) users, and consequently those numbers have, until now, been excluded from the company's television ratings reports. But with the popularity of emerging technologies such as DVR and video-on-demand (VOD) becoming apparent, Nielsen is developing methods to track these time-delayed-TV viewers.
"Working together, Nielsen Media Research and Tivo have developed software that will enable the extraction of tuning, recording and playback information from Tivo's PVR system," Susan Whiting, president and chief executive officer of Nielsen Media Research, reportedly wrote in a memo to clients. "We are now in the early stages of looking at data."
Tivo, one of the most recognised names in the DVR industry, launched a device, also called Tivo, three years ago in the US that changed the way many people in the UK and the US watch television. Essentially, the Tivo device can record up to 40 hours of television, without tapes or optical disks of any kind. Moreover, Tivos are easier to configure than video cassette recorders (VCRs) because programmes can be recorded with a click of a button. This is due to the fact that Tivos are connected to a phone line, which allows them to call a computer each day to download the time at which the chosen programmes will be broadcast -- for a monthly fee.
These functions, along with its ability to let users skip through commercials and watch programmes on a time delay, are not only changing the way many viewers watch television, they are also worrying advertisers. In fact, television advertisers have complained, mainly because DVR users can more easily avoid commercials and their habits are harder to track. In early DVR trials in the US, people using DVRs skipped 88 percent of advertisements.
The software developed by Tivo and Nielsen is seen as one of the first steps in assessing the exact effect that DVRs will have on the nature of TV advertising. DVRs are also expected to lead to a new style of advertising, whereby brands will be included in programmes. According to Whiting's memo, Nielsen is collecting information from 10 households that use DVRs and the company hopes this small group will give it enough data to provide preliminary statistics to share with clients.
In the past, Tivo attempted to allay the worries of advertisers and broadcasters through deals that would push ads and new programmes on to users who were not expecting them. One scheme saw Tivo develop branded "advertainment" with US retailer Best Buy that appeared on the Tivo's main programming screen as a small box. Another scheme, which sparked a litany of complaints, saw Tivo automatically record the BBC comedy "Dossa and Joe" unless it was instructed to record a different programme. What's more, the programme could not be deleted for four days.
Tivos are available in the US and the UK and although the company plans to provide Tivo throughout Europe as well as in Ireland, a spokesperson for Tivo was unable to provide a timetable for the rollout.
Separately, Tivo Inc. said on Wednesday that second quarter revenue would be almost double what it had previously projected, citing the recognition of about USD12 million in licensing and professional services revenue. The DVR company said it now expects to report second quarter revenue of between USD23 million to USD24 million, well above Wall Street's current estimate of USD11.2 million. Shares in Tivo were up over 30 percent in New York in mid-morning trading on the back of the news.
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