Lead Blog Post
Television is facing a growing problem, more and more people are moving away from the classic TV set and turning to digital platforms for their media. (Edwards) This growing trend is having adverse effects on the economics of television since networks still mainly rely on advertising for revenue. Nothing effects the price of television advertisements more than the Nielsen rating system which tracks audiences for client stations, but for years the Nielsen ratings have been outdated. (Carter)
In October, Nielsen and Adobe Systems announced a partnership
to create what they claim the first cross platform system for measuring TV
programming distributed online. In other words, if you are accessing Netflix,
Hulu, HBO Go, or even YouTube, through any device such as a laptop tablet,
smartphone, gaming console, or an over-the-top box like Rouku Nielsen and adobe
will be able to track it. This will give Nielsen far more detailed and modern information
about people’s television habits. (Spangler)
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| A chart of the most popular online streaming services |
In order to understand how this partnership will effect
television ratings we have to first understand the way television ratings
currently work. TV ratings specifically measure what people are watching on
their actual television set that's sent out by TV networks in a linear stream,
not what you watch on your laptop, iPhone or DVR. (Hogan)
Nielsen Television ratings have long been a bit of a mess
and there have always been questions about their accuracy. Peter Suciu of Fortune.com defined the three
surprisingly archaic methods Nielsen uses to determine television Ratings. “The
first, involves asking a sample group of people to self-record their viewing
habits in a diary which are sent to Nielsen, the ratings company, for
standardization and aggregation. The second, involves “set meters” small
devices connected to home television sets to record viewing habits. The third,
involves “people meters,” also connected to home television sets, which record
and transmit viewing habits once an individual logs in.” (Suciu)
The Nielsen ratings are far from perfect. Last October the
television research firm, acknowledged that they had been reporting inaccurate
ratings for the broadcast networks for the last seven months, a mistake that
raised even more questions about the company’s increasingly criticized system.
(Carter)
Although these methods seem primitive the upcoming change to
incorporate digital and streaming devices has many in the television business
nervous. TV ratings are not only concerned with how many people watch a TV show
they are arguably more concerned about how many people watch the ads in TV
shows. Billions of dollars are spent every year on Television ads and the
Nielsen ratings play a large role in setting the price. Nielsen’s ratings are the basis for much of
the economics around television advertising. (Bond) Any change in them could
have tremendous ramifications, especially considering that those that watch
television online often fall into the 18-49 demographic, widely considered the
most valuable audience for advertisers. (Molloy)
Suciu described the historical precedent for such a shift. “In 1991, Nielsen SoundScan began tracking
record store sales data using computers. Before then, the music industry trade
magazine Billboard tracked sales by calling stores across the country and
asking them. The new ratings system revealed that seemingly marginal genres
such as alternative rock and hip-hop had much stronger sales than had
previously been indicated.” (Suciu) Television viewers and industry leaders
suspect that the new Adobe-Nielsen partnership could have the same effect on Hollywood
by revealing television programs that are more popular than Nielsen projected.
Currently, there are no statistics on what shows are
streamed the most online but we can assume that those shows would be similar to
the list of shows with the most illegal downloads. According to TorrentFreak the most pirated
show of last year was Game of Thrones, followed by The Walking Dead, The Big
Bang Theory, How I Met Your Mother, Gotham, and Arrow. (Ernesto) I predict that these shows can expect a boost
in their ratings once the new Nielsen-Adobe system goes into effect.
The best example of how TV is changing might be a personal
one. Last year my family canceled our cable subscription and instead signed up
for Netflix, Hulu Plus, and Amazon Prime. Our television set lets us access
these services as well as ESPN 3 and YouTube so we can instantly stream movies
and shows on our television without having to hook up our computers. To be honest, I haven’t missed cable at all.
Every show I’m interested in has their episodes online the day after and all
the major sporting events are carried on the network channels. Given the amount
of money we are saving I think this type of set up will become more common and
thanks to the Nielsen and Adobe partnership my family’s viewing habits won’t be
invisible to advertisers.
Works Cited
Edwards, Jim. "TV Is Dying, And Here Are The Stats That
Prove It." Business Insider. Business Insider, Inc, 24 Nov.
2013. Web. 30 Jan. 2015.
Carter, Bill, and Emily Steel. "TV Ratings by Nielsen Had
Errors for Months." The New York
Times. The New York Times, 10 Oct. 2014. Web. 30 Jan. 2015.
Spangler, Todd. "Nielsen, Adobe Team on Digital-Content
Ratings." Variety. N.p., 21 Oct. 2014. Web. 30 Jan. 2015.
Hogan, Dwayne. "How Do Nielsen Ratings Work?" The
CableTV Blog RSS. N.p., 19 Feb. 2013. Web. 30 Jan. 2015.
Suciu, Peter. "The Ratings System That Could Change the
TV Industry forever." Fortune. N.p., 23 Oct. 2014. Web.
30 Jan. 2015.
Bond, Shannon. "Nielsen Launches System to Measure
Online Audiences - FT.com." Financial Times. N.p., 21 Oct.
2014. Web. 30 Jan. 2015.
Molloy, Tim. "Why Networks Are Bleeding 18-49-Year-Olds
-- CBS Has the Answer." TheWrap. N.p., 29 July 2013. Web. 30
Jan. 2015.
Ernesto. "'Game of Thrones' Most Pirated TV-Show of
2014 | TorrentFreak."TorrentFreak RSS. N.p., 26 Dec. 2014. Web. 30
Jan. 2015.
