Over dinner during the recent upfronts, a TV ad sales executive asked why I wasn’t writing about C7, the television industry’s move to eke an additional four days of viewing credits out of DVR viewing.
While the move from C3 — ratings for commercials during live broadcasts, plus three days of DVR playback — to a C7 currency certainly will bring more ad dollars to broadcast dramas and sitcoms (the genres where most time-shifting occurs), given that more than 95 percent of TV sports are watched live, it seems that the new standard will have almost no impact on sports programming.
But the executive suggested I take a longer-term view.
There’s certainly no threat today in a market where live sports is the most popular programming on TV. But what about a couple of years from now, especially if the move to C7 significantly builds up the audiences for dramas and sitcoms? Cable operators already can insert new ads into their video-on-demand streams and keep on-demand viewers from fast-forwarding through them. As nontraditional viewing continues to grow, so too should the audiences for dramas and sitcoms and, in turn, audiences for C7 advertising.
If those genres start skimming more money from advertisers, the fear is that some of it will come from live sports. It’s a market view that, if it ever comes to pass, is still probably a decade away.
Today, the early returns show that ratings and ad dollars are proving to be scarce with the move to C7.
The first C7 deals this year, notably with Group M, show relatively small increases over C3 deals. Per Nielsen, over the course of the 2013-14 broadcast season, the bump from C3 to C7 resulted in an average increase of just one-tenth of a ratings point in the all-important adults 18-49 demo.
I was talking with my friend, AdWeek’s former TV advertising reporter Anthony Crupi, about why so few scripted series see a big lift between C3 and C7. Crupi pointed out the popularity of fast forwarding through commercials among DVR users.
“People generally don’t watch commercials when they’re time-shifting content,” he said. “And that’s what C3 and C7 measure. It’s a blend of average commercial ratings and three or seven days of time-shifted deliveries.”
Still, it’s clear to see that viewers are embracing time-shifting more than ever. As many as 36 prime-time broadcast shows had a higher time-shifted rating than live rating during the 2013-14 season, according to ratings information provided by Horizon Media.
Take a show like the NBC drama “Revolution.” It saw a 163 percent increase in its live-plus-seven-day DVR playback over its live rating within the adult 18-49 demo this season, according to Horizon Media research director Brad Adgate.
Prime-time TV’s top show, NBC’s “Sunday Night Football,” saw only a 5 percent increase from its live rating to its C7 rating within the 18-49 demo, Adgate said. With sports, live viewing is all that matters.
So far, viewership increases from C3 to C7 are not significant enough to merit any raised eyebrows — and they certainly have not been big enough to mitigate the advantage of live sports. Put it this way: Ratings for “Sunday Night Football” increased just 1/100th of a ratings point upon application of C7 data over C3 data.
“Even if you go with C7 and you get a higher rating, there’s still a value for watching it live that advertisers love,” Adgate said.
Excluding sports, from September 2013 to March 2014, C7 ratings increased around 4 percent over C3 ratings, Adgate said. For example, ABC prime time posted a 1.70 C3 rating and a 1.76 C7 rating during that time period. Fox moved from a 1.63 C3 rating to a 1.72 C7 rating.
“There just isn’t that much of a surge from C3 to C7,” Adgate said.
Nobody doubts that C7 will bring more viewers to dramas and sitcoms. But one network ad sales executive argued that the C7 move will benefit sports TV by putting more of a premium on live viewing.
The executive suggested that live sports will get a disproportionate amount of advertising from movie studios, which traditionally are more time sensitive. Car companies and retailers that depend on specific sales also could court a live audience.
The C7 system will attract advertisers that have evergreen messages.
The problem is that it will take years before the industry will realize whether C7 helps or hurts TV sports advertising.
John Ourand can be reached at jourand@sportsbusinessjournal.com. Follow him on Twitter @Ourand_SBJ.
