TiVo report: Networks lose out with C3 ratings
With the advertising upfront season looming, TiVo released a report this morning that said the top-10 “season pass” programs lost $88 million in ad revenue due to the current C3 ratings system.
By switching to C7, which would provide commercial ratings for live viewing plus an additional seven days instead of three, ratings and revenue would increase by 5 percent to 17 percent, according to TiVo.
Looking specifically at the commercial rating for ABC's “Modern Family,” TiVo Research saw an increase of 10.9 percent by adding viewership from four to seven days after the telecast. Based on network television ad prices, which were supplied to TiVo by SQAD LLC, 10.9 percent equates to a per-spot increase of $26,665. Over a full single season single season, based on an average of 17 spots per episode and full season of 24 first run programs, ABC is missing out on an estimated $10.9 million in revenue per year.
“American Idol” would increase its revenues by $14.4 million while “Grey’s Anatomy” would add $11.20 million with C7.
"Our unique commercial audience data demonstrates the real opportunity costs created by the gaping holes in the current C3 ratings currency and how filling in the blanks can help inform negotiations in this year's upfront. Commercial ratings based on second-by-second viewing data not measured by the ratings currency are the only way to capture user behavior in a DVR environment accurately, and therefore the only way to assess the potential value that could be unlocked by going deeper than the ratings currency," said Jonathan Steuer, chief research officer at TiVo. "There's a notion among some in the industry that by simply gaming the blunt instrument of average-commercial-minute measurement the ratings currency provides, networks can gain back some of the advantage advertisers get from unmeasured viewership beyond the three-day window.
“The reality is that only an extended measurement approach that combines both precise measurement of media viewership and a comprehensive understanding of audience composition can enable networks and advertisers to evaluate what commercial ratings truly are over the course of a seven day viewing period."
While C7 would be good for networks’ coffers, advertisers worry that their ads would lose some of their appeal over that time frame, especially if it’s a timely event such as a movie premiere.
DVR users also tend to accumulate a lot of recordings that may lose their luster thanks to over-the-top viewing or social media.