Discovery svp, research Steve McGowan recently returned to Discovery after a 7-year stint at Nielsen. In an interview with research veteran Charlene Weisler, McGowan gives his unique perspective on the evolution of research and talks about his work at Nielsen, set-top box data, the evolution of DVRs and VOD, and future predictions.
Steve, how do you think DVRs will evolve with viewer usage? Do you think it will reach critical mass?
SM: It will be interesting to see what happens. There are now DVRs at the head-end, so that people who are perhaps intimidated by technology and are possibly more comfortable with video on demand will try them. We’ll see how these types of DVRs will take root. There have been a lot of speculation and legal proceedings, but I don’t think there will be much movement on DVR penetration until the MSOs find a way to essentially give those boxes away and make them more affordable.
We are starting to see DVR penetration leveling off. I think that people understand what the capabilities are of the box. They are refining the way they use it — having to figure out how to share the hard drive across all the members of their family. At that point, it can become more of a tool that viewers can use to figure out what they want to watch. Since the early 1990s they have been saying that they always want to watch what they want, when they want. Now we are also hearing consumers add “where they want.” Some of that behavior is beginning to take hold too.
What type of research did you do on Video On Demand while at Nielsen?
SM: Video On Demand was something we started to do by using primary research. We conducted phone and online studies, and before we got the data from the cable operators, we starting looking at the file server data. It was all attitudinal and usage studies – the reported use of VOD. I juxtaposed that with DVR usage, trying to find out if one of those technologies would surpass the other.
What we found was that you had a certain camp who were more loyal to their DVRs and others that had more loyalty to VOD, maybe because it was an easier technology to understand. Then, as Nielsen was able to improve its measurement and metering technology, we figured out ways that we could track playback of Video On Demand. In particular, we worked very closely with HBO, which is one of the major drivers of Video On Demand content because of all the [content] offerings they give to their subscribers.
Did you see a difference in the demo profile of the DVR user versus the VOD user?
SM: As we looked at those who had access to either technology, what we tended to find was that the DVR home, not surprisingly, was a bit more upscale. Both of them had digital cable because that is one of the requirements for that tier of service, but because the incremental cost of the DVR service was anywhere from ten to twenty dollars a month, we found that the DVR homes tended to be more upscale and more technologically-oriented (they know how to use the device). Those were the main differences.
I heard that you were able to analyze some set-top box data while at Nielsen. Can you talk about that?
SM: Sure. In the early days, Nielsen was partnering with Charter to get some of their set-top box data out of California. What we did was harvest the data from Charter and collect and link the data with the panel home in the Nielsen sample. We were able to see what the Nielsen box said and what the set-top box said. We examined what kind of tuning was going on.
It was really interesting and it enabled us to begin to understand some of the shortfalls and some of the opportunities from set top boxes, such as how often people turn the box off and if there is really someone sitting in front of the channel. Those were some of the early learnings.
This Q&A contains segments from a video interview in which Jack discusses more on VOD and DVRs, along with the evolving opportunity of set top box data. You can view the entire conversation at WeislerMedia
(Interview conducted by Charlene Weisler, a research veteran, member of the Set Top Box Collaborative executive committee, the CTAM Research and Research Planning Committees and a CIMM consultant. She can be reached through her blog www.WeislerMedia.blogspot.com or at WeislerMedia@yahoo.com)