• Viewers do watch commercials on their DVRs. Among DVR homes, playback lifts commercial ratings by 44% among 18-49s after three days. Among all 18-49 year-old viewers DVR playback adds 16% to commercial ratings after three days
• More than 38% of DVR users are over age 45.
• When DVR playback is included, DVR households watch more primetime programming than non-DVR households.
• Overall, 49% of time-shifted primetime broadcast programming is played back the same day it was recorded, and 88% is played back within 3 days.
• DVR playback peaks at 9pm and 10pm.

Download the full report DVR Use in the U.S.

The survey is based on a sample of 1,372 households. Telephone interviews, using a computer-assisted telephone interviewing (CATI) system, were used to collect the information from the sample households. Interviews were conducted with a randomly selected household member at least 12 years old.

Hot Trends:

• Bigger and Better TVs
  Upgraded television sets in the form of bigger screen sizes larger than 41 inches and better resolution continue to outfit in-home theaters. Specifically, HDTV sets have increased 26.9% and LCD flat screens are up 48.2% from Q3 2008 to Q2 2010.

• Home Internet Access
  Internet and broadband access in the home continues to rise – up 2.5% and 3.8%, respectively between Q1 2010 and Q2 2010. Currently, 85.3% of Americans have some kind of Internet access either through home and/or work.

• Home Wi-Fi
  The freedom of untethered connectivity helps the trend to go wireless continue. Having a wireless network in the home increased 8.2% from Q1 2010 to Q2 2010 and 24% over eight quarters.

• Digital Video Recorders
  Demanding schedules have made time-shifted viewing a must-have for 40% of U.S. homes who currently have a DVR device. And DVR adoption continues, increasing 14.5% from Q1 2010 to Q2 2010.

• MP3 Players
  Almost half (46%) of all U.S. homes now have at least one MP3 Player. Apple’s iPod is still the dominant player in this category, capturing 63% of all MP3 Player-owning households.

• Apple iPad
  The Apple iPad launched on April 3, 2010, and was added to the Nielsen Home Technology Report survey shortly thereafter (May 2010). According to the Q2 report, 3.6% of U.S. homes now own an iPad and this hot trend will be closely followed.

Cooling Trends:

• Satellite Radio
  While crystal clear audio, uninterrupted playlists and anywhere access make Satellite Radio an enticing experience, it experienced only modest growth over the past eight quarters, up just 5.5%.

• Video Cassette Recorders
  VCRs continue to disappear from U.S. households as DVRs and DVD players provide both greater functionality and better playback clarity at an increasingly affordable price. Add the fact that U.S. movie studios are no longer releasing movies in the VHS format and you can expect the VCR to become just another trivia question for a digital generation no longer familiar with yesterday’s analog technologies. Currently, VCR ownership within U.S. homes is 70.2%, down 10.6% from Q3 2008 when it was 78.5%.

• Digital Video Disc Players
  DVD players are down 0.6% from Q1 2010 to Q2 2010.  With 87.9% of U.S. homes already owning a DVD player, the “hot” growth phase for DVD players has long passed.

• Personal Digital Assistants
  The PDA is also becoming a rare sight these days within U.S. households. PDA ownership has declined 25.5% since Q3 2008 and will likely continue. Credit the Smartphone that provides both handheld computing capability and a phone for much of the PDA’s steady market share decline.

Scott Brown and Nielsen’s Nic Covey will be on hand this week at CES as panelists. View the presentation deck on Three Screen Measurement from Scott Brown.

Cutting The Cord

While an overwhelming majority, 88%, of U.S. households have a wireless phone in 2009, most still maintain a traditional landline at home. However, this is changing. In the second quarter of 2009, over one in five households reported they are wireless cellular only—an increase of 16% from the past year. This increase comes from the two-thirds of households who have dropped their landlines as well as from young adults that started new households with just a wireless phone service.

Expanded Mobile Media

This year all media player products in the market have seen growth. Given an increase in availability, product options and cost reductions, these types of products have become more mainstream. With one-third of households owning gaming devices and digital video recorders, they are becoming well established products that continue to exhibit healthy year-over-year growth rates. Growth of portable MP3 music players without video capabilities leveled off in 2009 at 25%. Adoption of other alternative media player products is still in the early stages, although all have exhibited growth this year. Most notable are devices that offer video capabilities.

Download more highlights from Nielsen’s 2009 Convergence Audit.

Manish Bhatia, President Advanced Digital Client Services,The Nielsen Company

SUMMARY: While still in the early stages of a digital media revolution, the consumer has entered an age of enlightenment with expanded options for devices, content, and schedule. The consumer has responded with expanded use of those media options. But changes in technology, regulation, pricing, content distribution deals, etc., will complicate predicting the future growth (and future winners).

It is truly a golden age of media for consumers. Content is available on multiple screens almost anywhere a consumer wants it—at home, at work, on trains, and on planes. And who among us hasn’t been nearly run down by a cab as we check an email, a news item, a tweet, or a web video on our smartphone as we cross the street? The big media story of 2009 is how we’ve fully embraced these expanding options… and come to demand even more.

Nielsen data shows that time spent on each of the three screens—TV, PC and Mobile—is increasing. In particular, the consumption of video content is on the rise across all platforms. Since the mainstreaming of the Internet about 10 years ago, TV viewing is up by about 20%. Online video consumption stands at more than three hours a month and mobile video is growing too, as devices and connectivity become more widespread.

So what gives? Where is all the extra time coming from? And why isn’t media consumption a zero sum game? Let’s look at a few factors.

Television:

1. High Definition: The quality of TV content has improved significantly with the advent of HD programming. Coupled with falling prices of TV hardware, HD technology has significantly enhanced the viewing experience.
2. DVRs: Have allowed viewers much greater control over when they watch what they want to watch. Time-shifted viewing is also on the rise.
3. Expanded Options: The increasing number of channels and video-on-demand content is contributing to the overall growth in TV viewing.
4. More TVs than People: The sheer growth in TV sets in the home means that viewing opportunity is available in almost every room, and every member has their own set…and then some.

Internet:

1. Bandwidth: The vast majority of users have broadband, which allows the delivery of richer content without degrading the experience.
2. Availability of Content: Rich media, streaming media and more offline content is finding its way online. And a constant stream of new consumer-generated media via Facebook and Twitter are deeply engaging users to spend more time online.
3. Accessibility: More than 40% of online video is viewed at the workplace. Workers sitting in their offices for 40 hours a week do spend a bit of that time surfing the Internet.

Mobile:

1. Infrastructure Upgrades: Service provides are upgrading networks fast. 3G networks are now the norm, and 4G is being rolled out allowing for faster download speeds.
2. More Powerful Devices: iPhones, Blackberries, smartphones, app stores and the recently launched Droid have blurred the lines between phone and PC. These devices are leading the growth of media consumption on mobile.
3. New Content: TV programming is now available on cell phones for a nominal fee. For someone who can’t get enough TV at home, they can take it with them almost anywhere.
4. Anytime Anywhere Media: One of the biggest advantages of smartphones is that the user can share content or have it delivered wherever they want.

What’s Next?

What does the next 3-5 years have in store? Given the massive change going on in technology, regulation, pricing, content distribution deals, etc., doing a simple projection based upon historical trends may be misleading. But five key trends will have a significant impact.

1. TV Everywhere: A cable MSO initiative to make TV content available to paying customers online took notable steps in 2009. The approach enhances viewers’ value proposition by taking content currently available only on TV to any screen, anywhere.
2. Net Neutrality: The big question before the FCC: Should Internet Service Providers offer all content, no matter the source or bandwidth requirements, to users with the same priority? Content companies want it. Access providers want to have some control over what flows through the network they have built to optimize performance. The legislative outcome will have a significant impact on content available online and mobile networks.
3. Tiered Pricing for Internet: “All you can eat” access plans—now the norm for broadband—changed the “pay as you go” model. With increasingly rich content available online, heavy video online consumes use much more bandwidth than a light or occasional user. Should both pay the same amount since the cost to deliver Internet content is variable? The counter argument is that TV is a fixed price model and with cost of bandwidth dropping fast, the incremental expense associated with a heavy user should not warrant higher prices.
4. Interactive TV: Various companies are rolling out interactive services to enrich the TV viewing experience and to enable viewers to interact with programming and advertising messages. While this is in the very early stages of rollout, if successful, TV can be expected to take an even larger share of people’s screen time.
5. Over-the-Top TV: With wireless Internet access now common, device manufacturers are introducing DVD players, TVs and Video Game consoles with built-in wireless connectivity. These devices piggy back on an existing wireless network and pull content from the Internet straight to the TV set with no additional hardware, wires or advanced degree in electronics required. And there is content that is well suited for TV that can be delivered via the Internet—NetFlix is just one example. Some providers are making applications like Facebook available on the TV sets. Not all of the experiments will succeed as consumers will not want some applications on the TV. Expect TV in 3-5 years to be quite different from what it is today.

By this time next year, we’ll likely be dissecting the impact of a few other game-changing additions to the media mix (EpixHD? An Apple tablet?). No matter what the addition, any new evolutions to the media universe will have to follow the new laws of increasing portability and increasing content to satisfy the consumer’s increasing demand for anytime/anywhere access. We’ll be watching.

2010 U.S. Outlook

Part 1: Cross Media

• Big Screen, Smart Screen, Small Screen: Top 5 Cross-Media Trends
• You Can Take It With You: Future Trends In Media

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Part 2: Consumer

• Winner Winner Chicken Dinner – Top 5 Consumer Goods Spending Trends
• Innovation Creates Opportunities for CPG Growth
• Aging Puts a Wrinkle in U.S. Marketplace

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Part 3: Advertising

• Talking Back – Top Five Advertising Trends
• Get Ready for the Audience-Centric Web
• What Would John Wanamaker Say Today?

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Part 4: Entertainment

• There’s No Business Like Show Business – Top Five Entertainment Trends
• Game On – The World is Watching More Than Ever
• Video Games in Play

American children aged 2-11 are watching more and more television than they have in years. New findings from The Nielsen Company show kids aged 2-5 now spend more than 32 hours a week on average in front of a TV screen. The older segment of that group (ages 6-11) spend a little less time, about 28 hours per week watching TV, due in part that they are more likely to be attending school for longer hours.

This trend of increased viewing among children mirrors the overall increase in media consumption we’ve been tracking over the last two years across TV, Internet, Games and Mobile phones. And much like their older family members, the majority of viewing for these kids is still done watching live TV.

Very Early Adopters
While 97% of kids’ viewing is through live TV, younger kids spend more time than the older group viewing via DVR, DVD and, to a lesser extent, VCR. Four percent of kids aged 2-5 watch via those devices on average across total day compared to 2.3% for those aged 6-11. Their considerable use of these devices at a young age points to them being able to adopt new devices comfortably as they grow up.

One more thing younger kids do more than those age 6-11 is watch more commercials. Young kids also watch commercials in playback mode more than older kids and adults, as well as watch their favorite shows over and over and over on DVD, VOD and DVR.

Older kids may not use the DVR, DVD and VCR as much as the very young, but they spend twice as much time playing video games — 2 hours 23 minutes a week compared to 1 hour 12 minutes for those 2-5. Internet usage among older kids is also significantly higher as nearly half of kids 6-11 spent time on the Internet in August versus 20% of kids 2-5.

Three NFL games appeared at the top of the C3 ratings list for the 18-49 year old demographic group. These games, like most sports programming, did not receive much of a lift from rating for live viewing and the C3 number. The top entertainment shows received a bigger boost from DVR playback, however. After three days of DVR playback, Fox’s House rose more than a full rating point to 6.3 from 5.2. ABC’s Grey’s Anatomy rose from a 5.1 live rating to a 6.1 rating on C3.

A key factor to this expansion is the integration of DVRs into cable and DBS set top boxes: 55 percent of DVR homes had it as part of their cable box and 40 percent had a DVR within their DBS box.  Just 5 percent had a standalone DVR.  And as households recognize the convenience DVR offers, a growing number are becoming multi-DVR households.  25 percent of homes had two, while 5 percent had three or more.

“DVRs are changing the way Americans watch TV. Despite the competition for viewers’ attention from the Internet, video games and other media, TV viewership continues to rise.  As with other vehicles, convenience is key – allowing people to consume content when they want.  DVRs are a relatively inexpensive and useful tool for viewers to do that,” said Pat McDonough, Senior Vice President, Planning Policy & Analysis at Nielsen.

So what are people recording and when are they finding the time to playback recorded programs? Most playback is occurring during primetime, early fringe and late fringe.  Playback during the day was highest on Saturdays and Sundays as viewers used the weekend to catch up on their favorite programs and movies.  Programs recorded between 8 p.m. and 9 p.m. were played back within the same day more than those airing at 10 p.m., which could impact live viewership of programs airing at 10 p.m. and later.

Of Nielsen’s 56 Metered Markets, the top ten for DVR penetration are:

Download a full copy of Nielsen’s DVR report, including more detailed information about playback, impact on program loyalty, demographics and possible implications for networks here.

Conducted on behalf of the Nielsen-funded Council for Research Excellence, the study ran over the course of a year and used a custom media collector program developed by Ball State.  Researchers gathered a wide range of data usage of any of the four categories of screens: traditional TVs (including DVD/VCR and DVR viewing), computers, mobile devices and “all other screens,” including in-cinema movies, GPS and display screens outside of the home.

Key findings of the study include:

• Consumers aged 45-54 racked up an average of more than 9 1/2 hours of screen time a day.

• The average for all other age groups was similar at roughly 8 1/2 hours.

• Computer video watching took on average just two minutes a day.

• TV still dominates, even among those aged 18-24.

• Radio usage has dropped to third, behind TV and computer usage, but ahead of print media.

• TV viewers were exposed to an average of 72 minutes of TV ads and promos every day, dispelling the conventional wisdom that people are channel-hopping or otherwise avoiding ads.

Read the full press release.