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TV-Commercial Watching Up on VOD as Viewers Pay for Premium: Nielsen

Stocks in this article: NLSN

NEW YORK (TheStreet) -- More people are staying with commercials when they watch video-on-demand as opposed to live network viewing, according to a study by Nielsen Holdings (NLSN) released today.

The thinking might seem contradictory but viewers of VOD appear more apt to watch more minutes of the allotted program time for a show such as "Walking Dead" or "Breaking Bad" if they're paying for it. 

That's good news for pay-TV providers, the networks producing the content and the advertisers who pay for that viewing time. The success of Netflix, which is available in a mind-numbing 29% of all U.S. television homes, has troubled advertisers concerned that the trend in viewing away from live viewing to video-on-demand will mean fewer people are likely to be soaking up their commercials.

Nielsen found that on-demand watchers, eager to get their favorite shows when they're free to watch them. actually view more of the commercials shown within those programs. In the average 30-minute program, Nielsen found that on-demand watchers viewed an average of 28 minutes whereas a users of digital-video-recorders watched for 23 minutes and live-viewing for 20 minutes.

The study, which Nielsen says is ongoing, produced results that countered initial predictions that video-on-demand viewers, unable to access fast-forwarding available on a DVR, would tend to watch less of the overall programming.

The trade-off with video-on-demand appears to be that people are more likely to watch commercials in exchange for being able to access premium content when they want it.

--Written by Leon Lazaroff in New York.

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