In an article written either before or without knowledge of TiVo’s new commercials-on-demand service, Business Week breaks down Neilsen data on DVR usage. Among the 5% of homes that recorded the 4/16 episode of American Idol, about 80% skipped ads during later playback. While Business Week estimates only about 3% of all commercials are being bypassed (DVR and DVR-less homes), advertisers seek to only pay for “live viewing” exposure and worry that 20% – 40% of homes will have DVR functionality by the end of next year.
Business Week says: Nielsen now has the numbers to provide a meaningful picture of what’s going on out there. And it’s sure to make network brass squirm. Based on BusinessWeek’s analysis of the Nielsen numbers, when American Idol judge Simon Cowell eviscerated crooner Ace Young on Apr. 18, some 1 million homes caught the action an hour or more later on their digital video-recorders (DVRs). Of those viewers, perhaps 800,000 fast-forwarded past the commercials. With fewer than 3% of ads being zapped, the TV advertising model is far from dead. But with the Age of the DVR upon us, it’s in serious need of corrective surgery. “The two sides have to talk now, because [the DVR] threatens both networks and advertisers if they don’t.”