New study notes dramatic C3 increases

The theory that growing DVR usage is to blame for the mysterious ratings malaise gripping primetime got some new credence from a Nomura Equity Research analysis issued Thursday.

A comparison of audience figures in the 18-49 demo drawn from live and C3 viewing over the first quarter of 2012 versus the same period the previous year revealed a dramatic difference. The 22% plunge registered by the Big Four in live shrinks to just 8% when the first three days of DVR usage is factored into the rating. And even that level of decline is likely overstated largely because of the sizable dropoff this season in TV’s most watched series, Fox’s “American Idol.”

In recent weeks, many of TV’s most popular series, from “Modern Family” to “NCIS,” have been experiencing either series or season lows. While everything from daylight savings time to warm weather have been cited as factors, increased DVR usage has also been mentioned as a factor.Fox was feeling the live downturn most of all with a 46% drop in live viewing compared with the first quarter of last year due to both the decline of “Idol” and the absence of the Super Bowl, which it aired in February 2011. With C3 accounted for, that loss drops to 33%.

Given the Super Bowl aired this year on NBC, which is also surging with the success of the second season of “The Voice,” NBC is up 32% once C3 is calculated–but still down 3% on live alone. ABC and CBS demonstrated less dramatic single-digit declines in both live and C3 over the same period.

When measured on a season-to-date basis instead of a quarterly one, the increases remain dramatic when compared with full seasons past. Fox’s C3 numbers through March, for instance, are 35% higher than its live ratings, followed closely behind by ABC (34%), CBS (33%) and NBC (23%). Those totals are significantly higher than the differentials the Big Four registered in the 2007-08 season, which were all in the low teens.

While it’s hardly surprising that broadcast’s live numbers declined in the first quarter considering that trend has been in motion since 2008, the discrepancy between those numbers and C3 in the first quarter are greater than ever. “Note that broadcast’s first quarter 17% lift in C3 ratings vs. live is the highest level of lift we have ever seen,” wrote Nomura analyst Michael Nathanson.

In the fourth quarter of 2011, the live-C3 difference was 13%, which itself was a sizable leap from the third quarter, then 8%.

When broadcast’s decline is combined with cable, which was down 4% in the first quarter, the overall decline of TV was 10%. But C3 shrinks cable’s loss to just 1%, and TV overall by 4%.

All in all, broadcast has a one-third share of live viewing, but a 50% share of C3 viewing.

While C3 is technically a measurement of viewing of the commercials in a program over the three days following live, as opposed to the program itself, the ad-skipping on DVRs is actually declining. The “skip rate” for the Big Four in the 2011-12 season is 46%, down from 51% the previous season.

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