CBS Research Chief Dave Poltrack: Cord Cutting is Overblown
Watching TV shows on line is not a “major threat” to TV distribution model.
David Poltrack, CBS Corp.’s chief research officer, downplayed the threat of so-called cord cutting on traditional viewing models.
Speaking at the 38th annual UBS Global Media and Communications Conference, Poltrack asserted that web-centric households, meaning those with a broadband connection but no digital television service, have stayed relatively static from 16% in 2006 to 17% today.
At the same time, the percentage of households that are “fully connected,” meaning they have digital TV and broadband, stands at 50% up from 46% last year. Rather than jettisoning the cable or satellite TV subscription, consumers are adding services. In fact, 76% of fully connected homes have a DVR as well.And while plenty of consumers watch some streamed content, regular streaming is “an activity pursued by a small minority of the population” that is not growing at a “significant rate” -- from 5% in 2008 to 6% in 2009 and 2010. As of May 2009, Nielsen reported that video streaming accounted for 1.7% of total video consumption while traditional TV viewing represented the other 98.3%. But what is affecting the networks, said Poltrack, is the DVR. It’s adding significantly to tune-in, but networks are still largely unable to monetize that tune in beyond three days of commercial viewing. “You can no longer pay much attention to the overnight [ratings],” said Poltrack. CBS adds an average of 1 million new viewers from same-day playback and another 1.5 million viewers over the next seven days for a total of 2.5 million viewers for the average program. “In other words,” added Poltrack, “approximately one fifth of the CBS primetime audience comes from playback.” Among the younger demos (18-49), the DVR adds 42% to the live audience base overall. So far this season, Modern Family sits atop the list of shows that gets the most lift from DVR playback, adding 5.4 million viewers per episode followed by Grey’s Anatomy (5.0 million), The Big Bang Theory (4.7 million), Glee (4.6 million) and NCIS (4.5 million). In the second half of the season, Nielsen will begin to count multiple viewings of DVR’d programs, which could add significantly to live-plus-7 viewing levels. Under the current models of distribution, said Poltrack, “It’s a pretty safe bet that …we do not get full credit for the audience we deliver.” Poltrack also predicted a 5% gain in broadcast network revenues in 2011 thanks to the continuing economic recovery, a strong upfront and an even stronger scatter market with prices running over 20% higher than upfront pricing.
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