Seven Reasons Not To Worry About Sports DVR Ad-Skipping

TiVo revolutionized TV. DVR viewers can record shows they can’t watch live, condense program durations, pause & replay live TV, and skip ads.The business model for certain programs has been disrupted by ad-skipping. It’s better to watch serial dramas in an ad-free binge than to fritter 20% of your TV time on :30s and :60s.What about sports?For years, sports rights holders have feared ad-skipping. Thankfully, few fans want to watch a game 3-days-later. Indeed, while ad dollars to dramas have declined, sports TV ads continue to grow. Sports is best live.But over the years, network PR execs have emphasized this ‘live’ nature of sports at the expense of the full truth. Myths, such as, “98% of all sports are watched live,” continue to perpetuate sports industry dialogue. It’s also led to headlines calling sports programming ‘DVR-proof’.We know fans love to record sports, but this behavior is not just to skip ads. Fans record when they have conflicting activities. Fans pause live to help spouses and friends unload groceries – or to run out on a quick errand. Fans replay awesome moments for their friends and kids. Regionally, fans on the West Coast record sports events for the very practical purpose of time-shifting East Coast games that start before the workday is done.We’ve heard so many great examples of DVR boosting sports fandom that we decided to commission primary research on the subject. We published our survey of 1,185 sports fans with pay TV and DVR services last month. (The URL to download the free eBook is at the bottom.)We had a hunch that fans love to record sports; now we have proof.

1. (1) 84% of fans with DVRs use them to record sports; 
2. (2) Nearly a third of those are heavy users – doing this several times a week or more.

Clearly identifying this target market is important; our study also dives into the “Why?”The number one reason users do it is self-evidently not cannibalizing behavior. 75% stated “I know I cannot watch it live.”The second reason, “In case I miss the start”, was communicated by 58% of respondents and paints sports DVR as non-cannibalizing. This is a nod to the DVR as ‘fandom insurance’ for avid fans who, for example, might have to stay late for work when a big game is on.The third response in the survey is also claimed by 58% of the panel: “I like to fast-forward through the ads.”Of course, TV networks – and advertisers – don’t like it when their ads are skipped. But here’s the key:While it’s true that DVR usage enables some ad-skipping, the size and scope of this challenge to sports TV isn’t nearly the tsunami one might think.Here are 7 reasons we should not fear DVR-based ad-skipping. (1) No Shortage of Sports TV for Productive Viewers. Guess what sports fans do with the time they save by skipping ads? They watch more sports! Our survey lays out evidence that the heaviest DVR users are also the heaviest sports TV watchers. 37% record sports because it “Makes it easier to follow more sports.” So losing minutes from a viewer on one game is just as likely to increase minutes from that viewer on another game. (Sports personalization tools like those offered by Thuuz Sports can help.)(2) Sports Fandom is Strong Enough for Premium. There is a clear, secular trend toward ad-lite and ad-free subscription experiences in TV. The good news is that our study shows fans are intensely interested in an ultra-premium, personalized video highlights product. And they’re happy to pay $11 - $18/monthly for those experiences. By comparison, News is also a ‘live’ genre, but not nearly as monetize-able.(3) Sports has the Power of Scarcity. Recently, we’ve seen declining sports ratings, yet increasing ad revenue. Why? Simple: scarcity drives pricing power. Sports is scarce. There’s no substitute for the ‘simultaneous’ mass cultural impact of a well done live TV advertising execution.(4) Advanced Advertising is Arriving Now. There was virtually no advanced TV advertising just two years ago. And yet by 2018, household targeted, measurable TV ads will have grown at a 3-yr CAGR of 76%, hitting $2.17B according to eMarketer. In online and OTT, we’ve had ad format innovation by YouTube, Hulu, FOX, and others. Advanced ads can support higher CPMs, more targeted creative, and lower ad loads to reduce clutter.(5) Enlightened Industry Leadership. Brands with poorly targeted creative can do harm and the industry is growing wiser on this front. Dan Riess, EVP of Content Partnerships for Turner’s Ignite Ad Sales team said it best during TVOT in San Francisco last June. Paraphrased from Dan’s words: TV needs to diet (lighten ad loads) and exercise (better, more targeted creative.) Leadership is critical to moving ecosystems forward(6) The Wisdom of Perspective. Spoilers on social media also cannibalize games. So too do freely distributed, widely available highlights. The DVR does enable some ad-skipping – but with a million amazing choices, viewers are expert at maximizing their time. Retaining a viewer is better than losing one.(7) The Benefit of Experience. The industry has been remarkably adaptable to the threat of ad-skipping. Many MVPDs have successfully introduced non-skippable ads in free VOD content – training younger viewers that ad-skipping isn’t always possible.In the case of sports and DVR, the glass looks 7/8^ths full.We see a huge opportunity for sports TV networks and advertisers to join hands in building delightful, advanced-ad-supported experiences for fans. Our data on sports DVR usage can help to point the way forward.Get a free eBook download of our research results: Are Live Sports Really DVR-Proof?(Note: The video is here, start watching at 12:50.)