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Oct 2000

How TiVo Changes Our Behavior and Attitudes Towards Television

Christina Ialongo,
Hoover
and
Leslie A. Stone,
Goodby, Silverstein & Partners

INTRODUCTION

TV is America’s favorite source of entertainment. It’s our mindless relaxation, our magical ‘window to the world.’ We get information on pop culture, trends, news, values and even our personal relationships from TV. TV unites us; 98% of us have television at home, more than have running water.

When TV was popularized in the 50s, it created a sense of unity – a democratic intimacy – and of American pride. Simply having a television set was a huge status symbol. Today, TV is bigger than ever before. It’s in 100 million homes and there are nearly 1400 hours of programming on the air every day. Certainly, there is something for every taste. But it’s a challenge to find exactly what you want to watch when you want to watch it. That’s why Bruce Springsteen sings about ‘57 channels and nothing is on.’ It is on; it’s just not on when you want it to be. Or it’s on and you can’t find it. We’ve always had to choose between planning life around TV or missing our favorite shows.

The remote control, the VCR, cable... they all gave us the illusion of control. But until DVRs, we as consumers have never been in control of television. We’ve never been able to tailor it to our own taste.

When DVRs were launched in the beginning of 1999 they brought fascination, challenges and fear to the industry. As a result the media community will be forced to study how DVRs and other digital solutions will change viewing behavior and how they will account for revenue. Will viewing increase? Decrease? Will live TV viewing disappear? What about live events like news and sports? Certainly we will still want to see these in real time. And what will happen to commercial viewing and exposure?

This isn’t the first time in TV history that these fears have been expressed. Every major advance initiated similar concerns. VCRs in particular enabled us to time shift, but their major impact has ultimately been the creation of the home movie industry, not recording live TV. Most people don’t faithfully record shows and many still complain about the inconvenience of tapes and the challenges of programming. (According to Nielsen, most VCR time is dedicated to rented and purchased programming, not self-recorded programs.)

DVRs are a different story. They present previously unimagined options – pausing and rewinding live TV, simple tape-less recording, and the ability to learn what you like and search for appropriate programming. And these options can lead to an entertainment experience most people don’t even have a reference point for today.

Despite buzz with media insiders, most consumers are ignorant of the features, even the existence of DVRs. There are less than 80,000 DVRs in the market as of this writing and our research indicates that few people are aware of the category.

It’s only recently that the consumer press has picked up on the potential implications of this technology in a meaningful way (in particular see The New York Times Magazine August 12, 2000 article: ‘The End of the Mass Market’). Crucially, the Times article reveals how much potential this technology has to impact broadcasting and advertising.

Instead of focusing on the entire industry, in this paper we will cover the potential impact of DVRs on people’s lives. Our early indications suggest that TiVo transforms the way people interact with TV. We love TV more with TiVo. As one subscriber put it, ‘it is the only technology in a very long time that has actually revolutionized the way I interact with an existing medium.’ TiVo may not rival the impact of the invention of cars or even dishwashers, but it can be compared to other significant mass technology solutions such as the Walkman or microwave.

To date, there is no large-scale, nationally representative study on the behavioral and attitudinal changes brought about by DVRs. We can only make informed guesses. In this paper, we will present the proprietary research Goodby Silverstein & Partners and TiVo have done in this area.

NOTES

• We refer in this paper to TiVo specifically (since that is what we were studying); conclusions may be drawn to the larger category of DVR/PVR technology.
• Given the rapidly changing media environment today, it’s likely that many statistics presented here will be outdated even by the publication date of this paper.

METHODOLOGY

In this paper, we draw research from several main sources. Our intention is to present theories and themes derived from a body of information, not to summarize any one study. Sources include three qualitative research studies conducted by GSP, on-line data from TiVo customer satisfaction surveys, general customer feedback, data from the eBrain Consumer Research Report (‘PVR and Enhanced TV Potential’), and directionally quantitative in-home panel data. We’ve also studied industry standard sources and public information such as The New York limes article mentioned previously.

All of this data is directional in that it is based on small samples and early generations of the technology.

FULL BUT NOT SATISFIED
HOW PEOPLE FEEL ABOUT TV TODAY

‘They call TV a medium because nothing on it is ever well done.’
Fred Allen

Much like fast food, Americans use TV for a quick fill-up on news, information and relaxation. It is unquestionably our number one media source still far outweighing even the internet (according to Roper Starch, 84% of people turn to their TV for news and entertainment. Only a third of Americans look to their computers for information and even fewer to be entertained.)

Despite its ubiquity, TV’s position in our hearts as a beloved mass medium is not a simple story. We love to love television but we simultaneously resent its hold on us. Perhaps the novelty has worn off and we take TV for granted, or there are so many other things competing for our attention that we give it more passive time. As many have pointed out, it’s hard for ‘mass TV’ to satisfy individual interests of our increasingly heterogeneous society. Often, it’s on just for company or background noise.

TV watching occupies nearly the same amount of time as a part-time job

See Table 1.

TABLE 1: WE WATCH MORE TV THAN EVER BEFORE

But it's less engaging than it used to be

See Table 2

TABLE 2: HOW PEOPLE DESCRIBE TV OVER TIME

Additionally, only a small percentage of Americans have ever considered TV to be imaginative and stimulating. And maybe its lack of stimulation partially explains its appeal: as one respondent told us, the best and the worst thing about TV is identical: ‘You can veg out and lose yourself in a world of non-reality for hours.'’

Our qualitative research indicates that TV can have a pacifying effect, one that may be even more intense today due to the proliferation of channels and programming choices. Inevitably, with so many options, we end up surfing more and more, and ultimately feeling more compromised when we can’t find exactly what we are in the mood to watch at that time. It’s not that our ideal show isn’t out there; it never seems to be on right at the moment we feel like vegging out.

As TV fans have told us it, television can lure you in:

‘It’s mesmerizing to the point where you end up watching too much.’

‘It’s so easy to get sucked in and end up wasting a lot of time that you should have spent doing other things.’

‘It can lure you into wasting an entire evening in front of it at the expense of your life!’

None of this is to say that people don’t love TV (quite the contrary), just that it’s not always as fulfilling as it can be. With TiVo, these feelings change. We will explore how DVRs fix problems and frustrations viewers didn’t even know they experienced.

SIMPLY, WE WATCH DIFFERENTLY
HOW PEOPLE USE TiVo – KEY FINDINGS

‘It is fantastic. It has changed the way my entire family watches and enjoys TV’
TiVo User

Nearly everyone we’ve talked to tells us that TiVo changes the way they interact with TV and about a third say it’s www changed their viewing. We’ve seen many common themes in exactly how their viewing has changed:

• TV is more enjoyable
• Watching becomes more of a personal experience
• More TV, but fewer ads, are watched
• Time shifting becomes common
• Many tune to live TV before TiVo
• Viewers feel more in control
• Some use TiVo to create quality time with loved ones

Let’s explore each of these common themes in more depth.

1) We like TV more

People who have TiVo enjoy TV more. Subscribers are much more likely to claim TV as their primary source of entertainment than they were before TiVo. Most of the people we heard from say that TiVo has made their TV experience more enjoyable. What’s even more interesting about this is that TiVo is not solving a problem per se, it’s opening up new opportunities; people aren’t sitting around complaining about TV today but they are delighted to realize how much better it can be.

Anecdotal and qualitative research underscore these points:

‘I was not a TV watcher, but with TiVo I watch TV on my time and am finding that I am hooked on TV It’s so convenient.’

‘It has changed how I view TV. No more channel surfing. I can view what I want.’

‘It has made watching TV more enjoyable and helped fit it to my schedule instead of the TV’s schedule.’

2) Watching seems to be more intimate

Not only do people like TV more with TiVo, they also say that viewing becomes more personal and intimate. Many people have told us that they see watching TV as less of a social experience and more of a personal one.

Because it is so easy to record programs to watch any time later on, people are less likely to simply plop down in front of the TV and fight with family members over what each wants to watch. Instead of watching what their spouse or kid has decided to watch, they will wait until the TV is free again and then watch the programming they specifically set out to watch. Conversely, many users have also expressed that TiVo helps them bond with a family member by easily watching a favorite show at a time that works for both of them. We will explore this more fully later in the paper.

3) We watch more TV and, not surprisingly, spend less time with advertising

TiVo users report watching fewer commercials while at the same time spending slightly more time with TV than before; in effect, they are actually watching more program content. Findings cited in the Times article corroborate with our own findings, that people watch more content than before, as much as 2 hours per week. On what programs is this time spent? With TiVo, viewers are less likely to miss their favorite shows and more likely to discover new programming.

The implications on advertising viewing are undeniable. Most respondents say they skip some ads while watching through the DVR. There are many estimates on the percent of commercials skipped with a DVR. The Times article has one of the most aggressive estimates, claiming 88% of advertisements are skipped. We’ve also heard people in our qualitative intentionally starting to watch their favorite shows 10–15 minutes late and using the lag time to skip over ads. In this way they feel empowered, as if they are outsmarting the programmers.

It is ludicrous to believe that this signals the end of commercial television. Consumers have time and again reiterated that they’d rather have advertising than pay for TV. There will instead be a birth of new creative (and likely interactive) opportunities. As an industry, we will need to make our messages more intriguing, relevant and more entertaining. We’ll comment more on this topic at the close of the paper.

4) We put programming on our own time table

TiVo users adapt well to the features that allow them to shift the times of programs. The most commonly used TiVo features are selecting and recording programs for later viewing and pausing or rewinding a program during viewing. Most people say they use these functions daily. As one TiVo subscriber said, ‘it makes watching TV economical.’

Users take to the technology because it fits into their busy schedules and gives them an increased control over their time. After all, we ideally would like to watch TV both when we have the time and feel like watching, not simply when the shows we want are airing. One respondent told us what so many others have reiterated, ‘I no longer have the frustration of turning to the TV at a time that works for me, but not finding any programs that work for me. Instead, now I always know there will be something I consider worthwhile.’

Another user spoke of her love of the rewind function when she said, ‘I’m so comfortable using the rewind button, I’ve found myself frustrated when I realized I can’t rewind my car radio!’ And some users have even fantasized about being able to pause and rewind live conversation.

Considering the prolific use of the record function, it is not surprising that most users report watching programs on a different day than the airdate. If this trend continues, what will be the implication on the overnight rating system? In the future, we may need to re-think our measurement tools. We will also need to measure programs that are actually viewed, not simply recorded, if we are to be truly accurate.

The time shifting also raises the question about the power of TV in the future – will it become more or less important to us as a society to know what other people watch? Will TV shows continue to be a cultural badge and offer water cooler talk if we don’t watch them at the same time? Probably we will make a point to watch certain shows right away so as to discuss them the next day, but will postpone less time sensitive programs.

5) We like to tune first to live TV, then TiVo

Interestingly, we found that viewers often still tune into live TV before flipping to their TiVo programming. We believe that people still want to check in with the world. Maybe we will always want to browse to get a sense of what is going on in the world around us. Additionally, there will always be the desire to see certain events live, including news, weather and sports. And, perhaps we just like the shared experience of watching when everyone else is.

On the other hand, people may begin to tune first to TiVo once they get used to a new standard – watching TiVo, not ‘TV.’ An obvious factor driving this will be the need to gain people’s trust through reliably retrieving requested programming and making great suggestions.

6) TiVo is empowering – We feel more in control

The obvious emotional benefit of controlling television is empowerment. This benefit of freedom is, after all, the promise of many viable technology solutions. People are freed from conventions such as airdates and commercials and are therefore able to truly choose what they want to watch, not simply settle for what is on at the time.

Shifting the balance of power makes people feel better, more confident and even amused at their TiVo. We hear in research that people think of TiVo as a ‘house boy’ or ‘servant’ who works for its owner. While people don’t necessarily use the term ‘empowerment’ they do talk about feeling of (finally) being in control. As our zealots have told us:

‘It’s totally about being able to watch what I want when I want. I decide what to do; I don’t have to be a slave’

‘People who want to be in control of their lives will want TiVo. People who don’t need control won’t.’

‘The freedom of being able to watch the programs when I want is very satisfying.’

7) More quality time with loved ones

On the extreme, users have told us that TiVo affects personal relationships. People in research have told us how TiVo so completely changed their viewing behavior that it freed up more time for them to spend with family. Also, spouses talk about saving shows and waiting to watch them as a team. And while these benefits are arguably not unique to DVR technology, the old-world VCRs weren’t integrated into daily routine because they were too clunky. In this way, TiVo does not make the VCR obsolete per se, but it does replace a great deal of its intended functionality.

It’s hard to know just how far to take these extreme cases. People in focus groups often exaggerate their feelings, especially to justify expensive purchases to others in the home. Clearly, this is a trend worth watching, but perhaps one that’s been a bit exaggerated by early adopter zealots:

‘Now my girlfriend doesn’t think of me as a TV junkie.’

‘TiVo has helped my relationship with my wife. Now when my son comes into the room I can hit the pause button and pay attention to him. My wife sees me as being a much better father...’

‘I am out of town a lot and my wife and I love to watch “I love Raymond.” She waits for me to come back in town and that is our special time together I can spend time with the kids more and not feel I have to stop and watch TV’

SO, IS TiVo OUR TV DESTINY?
WILL THIS CHANGE REACH MASS LEVELS AND HAVE LASTING IMPACT ON OUR RELATIONSHIP WITH TV?

Americans embrace DVR features and, more importantly, integrate them into daily viewing patterns. This illustrates that the technology strikes a cord with consumers and certainly has a place in mainstream, not simply niche, America. Once used to them, we will never want to give up the control. As many users put it, ‘I wouldn’t give it up for anything.’

It’s true today that a lot of research indicates early DVR appeal amongst a classic gadget early adopter profile: younger adults, particularly men. The quickly changing truism that younger people are more comfortable interacting with new technologies is also borne out here. Since they are also amongst the heaviest TV viewing groups, we will not be surprised if they remain the most strongly engaged group.

But, our instinct and anecdotal evidence demonstrates that TiVo should have wide appeal in the long term. Once brought into the home, TiVo becomes a household appliance; everybody uses it and the types of programming recorded range from kids’ programming to dramas to sports. We also have heard that TiVo is useful for both heavy and light TV viewers. While heavy viewers called it ‘a great gadget for TV nuts,’ light viewers report it is ideal for those who don’t want to waste their few hours on ‘empty programming.’

DVR engineers had a goal clearly in mind – to create an intuitive platform that fits people’s individual lifestyles, rather than asking them to fit their lives around the technology. It gives each of us the flexibility to exercise the individual control we want over our TV viewing. And once we’ve gained this control, and the personalized experience it delivers, why would we ever give it up?

‘TiVo kicks ass!! This is the best consumer electronics device ever The interface is intelligent and easy to use. Someone should get a serious design award.’

‘TiVo becomes ubiquitous – I just take it for granted.’

‘We love it, we could not live without it.’

‘I don’t know how I survived watching TV before my TiVo!’

SO, IF THIS SUCCEEDS, WHAT DOES IT MEAN FOR US?
IMPLICATIONS FOR THE BROADCAST AND ADVERTISING INDUSTRIES

What does all this say about the future of TV? We’ve seen that when DVRs enter the home, the changes are not minor. That’s not even considering the many other digital and interactive TV options that will be available shortly. If these trends continue, they will have a significant effect on content, scheduling and even the revenue structure of TV.

What happens when we have more control? Will the quality of content and advertising need to improve in order to compete for our loyalty and attention? This is the dream of some top advertisers and programmers. On the other hand, a program may succeed or fail based, not on ratings, but solely on the revenue it generates through TV commerce. That is, it’s only ‘effective’ if it sells us something directly. How important will the viciously competitive scheduling line-ups be in the future? A good time slot will certainly be less guarantee of success.

What happens to the business model of TV if we skip some or all ads? Industry sources report there will be multiple revenue streams which will co-exist, and perhaps even compete, rather than the single-focused approach we use today.

Ultimately, viewers will have a voice in making these decisions. For the first time, we’ll have a choice not just in what we watch but how and when we watch. Network executives and advertisers will have to pay much more attention than ever to our viewing patterns in order to develop appropriate revenue and programming schemes.

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