TiVo ADDS UP

TV ratings in the US are calculated by Nielsen Media Research in a similar way as in many markets around the world today. The 5,100 participating households in the "National Measurement" are outfitted with what's called a "Nielsen People Meter."

This device measures what program or channel is being watched and who in the household is watching. It accomplishes this by instructing each member in the household to press a button indicating that they have begun watching television on that particular set. This process allows Nielsen to electronically gather demographic information.

Now, Nielsen has begun measuring ratings on DVRs (digital video recorders, such as TiVo) that allow viewers to digitally record programs when they are not at home or if they are watching a different channel as people used to do with now somewhat obsolete VCRs.

The results are more than encouraging. The programs airing in the most competitive time-slots are the most frequently "time-shifted" ones and they gain substantial audience. For instance, the third season premiere of "Lost" last week was watched by over 18 million viewers. According to Nielsen, there were 1 million more who saw it later that night on their DVRs, and that's about 5%.

What is quite startling about these findings is that only 12% of US homes own a DVR at this time, and they represent only 9% of Nielsen sample. The company expects the ratings increases to accelerate by the year's end when it's sample of homes will match the proportion of DVR owners.

The networks have tried to include these findings in advertising rates (that is to increase the price of advertising on their programs), but the advertisers have rejected that change and the networks have for the time being backed off.