Networks Rethink the Ratings Game As DVR Usage Spreads

What a difference seven days makes. Many primetime shows are seeing their ratings skyrocket when a week's worth of DVR usage is included — and network execs are scrambling to figure out how to adjust to a time-shifting world.
Now that DVR penetration has reached around 42% of viewers, it's having a real impact on viewership — and making the initial next-day ratings that everyone reports (which includes live viewing, plus only that night's DVR usage) increasingly irrelevant.
For example, when season four of FX's Sons of Anarchy debuted September 6, it attracted 4.9 million viewers, a good number, but not a network record. By the time seven days of DVR usage was counted, that number had climbed to 6.5 million viewers — making it the most-watched program in FX history.
"The numbers are so far apart that it's not even funny," says FX president John Landgraf.
The fact that nearly half of all TV viewers now own a DVR is making some of TV's top-rated shows even more top-rated when all is said and done. ABC's Modern Family leads the DVR pack, enjoying massive audience boosts once the final time-shifted ratings are in. Thanks to DVRs, the comedy's second episode, which initially aired September 28, eventually added a staggering 4.5 million more viewers to its total.
Where the live-plus-seven ratings have the most impact so far is making a mess of network bragging rights. In the adults 18-49 demographic, NBC's Sunday Night Football was originally the No. 1 show for the week ending October 2, posting a 7.7 rating. But once the DVR numbers came in, Sunday Night Football was virtually unchanged (up 1 percent to 7.8), while CBS' Two and a Half Men(8.9, up 20 percent from 7.4) and ABC's Modern Family (7.9, up 39 percent from 5.7) leapt in front.
In another example, CBS' Two Broke Girls was the top-rated new sitcom among adults 18-49 prior to the latest DVR data — but now that more extensive live-plus-seven numbers have come in, Fox's New Girl was the bigger beneficiary. As a result, both shows are tied for first.
"Part of the problem is when you report live-plus-same-day and single airing ratings, you convey the impression that the scale of a show is 'x' when in reality the scale of that show is 'y,'" Landgraf says.
Meanwhile, the DVR revolution is also giving hope to lower-rated shows, as their so-so numbers wind up looking a lot better once time-shifting is included. ABC's Grey's Anatomy averaged a rather disappointing 3.6 rating among adults 18-49 in week two of the fall TV season. But the show got a hefty 41.7% boost thanks to seven days of DVR usage, bringing its final rating up to a much stronger 5.1.
The same goes for the two-hour premiere of Fox's Terra Nova, which opened with a disappointing 3.1 rating in the demo. Once the seven days of DVR usage came in, the show wound up with a much more acceptable 4.4 rating.
That would seem to give credence to more patience among programmers. Now that DVR usage — as well as video on demand and online streaming — has reached critical mass, Landgraf says he usually waits five weeks, until every piece of ratings data is in, before determining the fate of a show. "You don't know who's watching your show until that time," he says. "The numbers are so far apart it's not even funny."
Execs are concerned that those initial ratings aren't ever corrected in the press — which means the lower number for Terra Nova's premiere will likely always be cited, not that later, larger rating.
ABC executive vice president Jeff Bader says he's resigned to the fact that initial nightly ratings will still get most of the attention in the press. "So we found out two weeks later that [among adults 18-49] Grey's Anatomy was actually the No. 1 drama of premiere week, and Pan Am and Revenge were the two highest-rated drama premieres. But it's so far after the fact," he says.
Ratings that include seven days of DVR usage aren't available for several weeks, which is why several networks have started touting ratings that include three days of DVR playback (which are available on a timelier basis). TV Guide Magazine has started using live-plus-three ratings for its weekly "America's Most Watched" chart.
Ultimately, it's another rating that actually matters in the TV business. The "C3" rating, which measures viewing during commercial breaks (including three days' worth of DVR usage), is what networks sell to advertisers. "That's what actually matters," Bader says. "You don't monetize anything" on live-plus-seven ratings.
The C3 ratings aren't widely released to the public, but according to a new Wall Street report obtained by Broadcasting and Cable magazine, the switch to those commercial ratings has also improved broadcast network performance — or at least, has helped slow network ratings erosion by several percentage points. The report's author, Michael Nathanson of Nomura Securities, says the difference has probably led to millions of extra dollars in advertising revenue for the networks.
"It's the real story of the year," says Jerry Bruckheimer TV president Jonathan Littman. "I now look at overnight ratings as a snapshot, but not an indicator. In the 12^th season of CSI we're seeing a nearly 40 percent increase in the demo after DVRs."
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