After much agonizing over the increasing loss of TV ad exposures due to digital video recorders and video on demand, a report released today (Monday) presents the US television industry with a stark, quantified reality: that such devices are likely to cost it billions of advertising dollars over the next five years.
A loss of $27 billion (€20.9bn, £14.2bn) over five years is predicted by management and technology consultancy Accenture in a new report on the effects of ad-skipping and video-on-demand.
It says the eight percent of US homes with DVRs already skip seventy percent of commercials, a trend set to increase as DVR penetration hits forty percent by 2009.
The impact on television will be greater than previously thought, adds Accenture - a sentiment amplified by the recent Cable & Telecommunications Association conference which admitted DVRs were a serious threat to its ad base.
Accenture says changes in TV viewing behavior will make reaching a mass audience more difficult and will also exert downward pressure on CPMs (costs-per-thousand viewers, the metric by which agencies buy TV audiences).
It predicts linear TV ad revenue growth of just three percent by 2009, compared with other industry analysts' forecasts of between six and ten percent growth.
Data sourced from AdAge.com; additional content by WARC staff