• May 29, 2015

Nielsen Will Rate Internet-Streamed Shows

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As more people have abandoned their television screens for shows streamed over the Internet, TV ratings provider Nielsen is working with Internet broadcasters to better understand consumers' online viewing behavior.

Nielsen has noted that cable and satellite TV viewership has been on the decline for the past five years. And though cable TV isn't expected to disappear altogether anytime soon, it is gradually being replaced by Internet options from Netflix, Amazon Prime, and Hulu.

This phenomenon has presented a challenge for Nielsen and advertisers, because there hasn't been a way to effectively measure Web viewership. For example, Nielsen has struggled to measure the audiences of Netflix's original series Orange Is the New Black and House of Cards.

The networks that are paying Nielsen to track views have been expressing frustration, according to James Nail, principal analyst at Forrester Research. And they haven't been shy in voicing their concerns over the accuracy of the ratings.

Ray Wang, founder of Constellation Research, agrees that the current counts are far from accurate. "Advertisers are losing a big piece of the audience impressions," he says. "For streaming services, they are not getting their fair valuations of ad rates."

That's why, in March, Nielsen released software that enables Internet broadcasters to capture viewership data that can be passed back to Nielsen for evaluation. This will help advertisers count what Nielsen calls the "binge watchers," "cord cutters," and "on-the-go multitaskers."

Even though this requires Nielsen to place some of the responsibility in Internet broadcasters' hands, it's still a step forward. "The digital channels are the fastest-growing part of the business," Wang says.

Paul Greenberg, president of The 56 Group, says companies that make use of Nielsen's new services will also potentially get a better idea of the audiences viewing their shows. "You can get a real, not estimated, audience size if you do this right," Greenberg says. "[That] is far better than a good guess—even if it's good, it's still a guess and less valuable than a real audience size."

Of course, obstacles remain to prevent achieving perfect measurements. Aside from the fact that Nielsen is expecting networks to put in a fair amount of the legwork themselves, there's the possibility the measurements will still not be 100 percent accurate—or easy to interpret. For one thing, there are other factors that further fragment viewing. Viewers who tune in to their favorite weekly shows on TV are often distracted and not totally invested. Measuring activity on tablets, smartphones, and PCs will not alleviate this concern entirely, considering that people often have a television show playing on their browser while other tabs are open alongside it. "There will be much double counting, as we live in an [attention-deficit disorder] world," Wang says. "So to the extent the channels increase, we'll need to increase precision of measurement."

Another issue the new measurements will fail to account for is viewer sentiment, Greenberg points out. Binge watchers are not always enjoying the program they're streaming, but their views are still being measured. "Just seeing that the show is being watched 'digitally' is valuable and good for the quantitative side," Greenberg says, "but we now require personalized messaging when it comes to contemporary audiences."

To craft such messages, it will be important for marketers to know the emotional and behavioral data—the qualitative—as well as the quantitative data, he adds.

Still, there is potential for growth. "If down the road, the analytics tools can identify behavior patterns," Greenberg says, "that is gold." —Oren Smilansky

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