From the Associated Press:
"NEW YORK - Starting next week, the company that measures what people watch on television will also follow what they record on DVRs to watch later.
The move by Nielsen Media Research is a reflection of how the traditional notion of watching TV is changing. And if Nielsen's numbers show that new technology is also changing what people are watching, it has the potential to profoundly disrupt a multibillion-dollar business.
An estimated 7 percent of the nation's 110 million homes with televisions now have digital video recorders, and that's expected to rise to one quarter of the TV population by sometime in 2007, Nielsen said.
Until now, Nielsen has bypassed these DVR homes when it signs up the estimated 9,000 families that make up its national sample of homes. These so-called Nielsen families provide the basis for its ratings, which make a show a hit or flop.
DVR homes will be included starting Dec. 26, said Karen Gyimesi, company spokeswoman.
It has taken this long partly because the Nielsen "people meters" that record what families are watching weren't equipped to handle DVRs, she said.
The company's new "active/passive meters" can, however. And with the help of a code embedded in a program by the television networks, they can tell when something that has been recorded is actually watched. They even know when people fast-forward through commercials.
"The most significant impact that it will have is that it will show the top-rated television shows will have a higher audience with a significant amount of playback," said David Poltrack, top researcher for CBS and UPN.
Testing over the past year has revealed what seems to be common sense: popular shows like "CSI: Crime Scene Investigation" and "Desperate Housewives" are the most likely to be taped and watched later, Nielsen said.
But since people with DVRs tend to watch more television than people without them, the data also may help smaller, cult favorites. Tests revealed that the WB's "Smallville," for example, was watched at double the rate in DVR homes than in homes without the device.
Nielsen each week has given its clients — mostly TV networks, advertisers and ad agencies — a list of how many people watch each program live each week. Now, Nielsen will offer three lists: the number of people who watch a show live; the number who watch it live or within 24 hours; and the number of people who watch it live or within a week. An estimated 90 percent of people who record programs play them back within a week, Nielsen said.
The immediate effect will likely be minor, since only about 100 DVR homes will be included in the first week's survey. But Nielsen plans to gradually add families and by summer it expects to have DVR homes in its survey that mirror the percentage of such homes in the nation as a whole, Gyimesi said.
It's not clear what Nielsen is going to do with its most explosive information — how many people zip through the ads.
Surveys have found nine of 10 people claim to do that, but TV networks believe this is exaggerated. If they're wrong, it could cost them: advertisers may look for lower prices if they have solid evidence of how many commercials are skipped.
An indication of how worried industry leaders are came last month when all of the broadcast network research executives took the unusual step of appearing together at a news conference. They claimed Nielsen's new numbers will show more television viewing, and that even if people zip through a commercial most of the time the message gets through.
"There is nothing in that mix that will devalue the value of network television," Poltrack said. "In fact, I think it will be exactly the opposite."
Meanwhile, technology marches on. Poltrack had to cut short an interview to meet with Nielsen about plans to measure how many people watch programming through video on demand.
That's not taken into account now by Nielsen. But Gyimesi said the technology to measure this is similar to that for DVRs, and Nielsen expects to begin including VOD numbers by the middle of next year."
With viewers using Tivo, "The West Wing" was one of the top ten most recorded shows, above "Commander in Chief".