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than the Nielsen rating system which tracks audiences for client stations, but for years the Nielsen ratings have been outdated.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.
Nielsen has been accused for not using most accurate way of calculating ratings, and I am here to agree with that. Based off how you say they get their numbers, it just doesn’t seem that reliable. On that note, advertising has definitely seen a huge change over the past couple of years. I always wondered how they got the ratings of who was watching what shows and when. I was curious to know what happens when the tv is on a channel but no one is in the room, and how that effects ratings. The fact that Adobe and Nielsen are partnering up to get ratings of people who are watching shows online, will definitely have a positive effect on the advertising industry. Based on the Nielsen report, Advertising and Audience, it is relevant that the cost of an advertisement has dropped over the past couple of years. “In 2009, a 30 second primetime TV ad cost 8.9k and in 2013 an ad cost 7.8k” (Nielsen). The costs have gone down because less and less companies want to pay the big bucks for the advertising. Online and privacy have changed a lot in the past couple of years now to. This changes how and what we see as advertisements as we are surfing the web. This will work out even better for advertising companies because they will be able to see who is watching what show based on their past searches and views. This means that the advertisements will be much more personal while watching the TV shows online, which will essentially be much more successful. According to Tynan, what you view on the internet however can play a big role in your life, “If your pattern of likes and Web visits correlates well with those of people who smoke, you might receive a higher quote for health insurance, even if your lips have never touched a cigarette (Tynan). This is important to see just how far these companies can see into our history. It is interesting to hear someone tell their personal story on how their family has changed to the Netflix/hulu/amazon bundle and completely gotten rid of cable. In my house, we have added the Netflix and hulu on our TV while still keeping our regular cable plan. This is pretty cool that people have the option to do this, and I agree that it will definitely start to take off way more.
ReplyDelete"Advertising & Audiences: State of the Media, May 2014." Nielsen.com. May 2014. Web.
Tynan, Dan. "Explained - Here's How Advertising Tracks You Across the Web." Yahoo Tech. 17 Nov. 2014. Web.
Kirsten James
ReplyDeleteI agree that it is evident that although the Nielsen system is flawed, it certainly does serve a very important purpose. The questionable accuracy in the collected data illustrated in this post makes it clear that the Nielsen system undoubtedly needs work, especially after acknowledging inaccurate ratings for months. The reason it is so important for the data to be correct is because “TV ratings are incredibly important. They help networks understand which shows to renew for another season and which to drop. They determine what a show’s audience is, and in turn, inform the prices that networks charge advertisers for those spots. Nielsen’s ratings are the basis for much of the economics around television advertising” (Suciu).
I have a personal example of the importance of recording accurate TV ratings. Over the winter break, VH1 aired a new reality television show called “Sorority Sisters.” Many people who belonged to Greek letter organizations were furious about the show since it poorly portrayed Greek life, and showed specific organizations in a negative light. Soon, an idea sparked over social media to not only stop watching the show to decrease ratings, but to publicly Tweet the advertisers of the shows that because they supported “Sorority Sisters,” their products would be boycotted. Within days, these companies responded to the Tweets of their audience, reporting that they were planning to remove their ads from the television show. It was also reported that there was a dramatic decrease in ratings from the first episode to the second one but the important factor for the television company was that they were now losing money after losing advertisers. Within a couple of weeks, VH1 announced that they were not renewing the series for another season and planned to air the remainder of the filmed episodes in one night rather (a Friday night, which is not a night prominent for high ratings) than show the rest of the episodes within the remaining few weeks.
This relates to Suciu because if the ratings were not made available, VH1 could have made the mistake of renewing the show for another season and facing the wrath of many angry audience members. Also, it was determined that the audience that the show mainly planned to reach out to (Greeks, teenagers, young adults) were not only not watching the show, but were extremely unsatisfied with the program and therefore lost money when it came to advertisements. It is also important to note how important gathering accurate ratings are, especially in this case.
Secondly, I also agree that many people are choosing not to watch television the “traditional” way and instead are choosing “modern ways to watch TV” (Hogan). Such “options include streaming services such as Netflix and Hulu, TV apps on smartphones and tablets, pirated downloads of shows, and en entire generation of viewers who are likely to ‘cut the cord’ and not watch TV in any traditional way.” (Hogan). I definitely think you are correct in saying that TV is changing. Personally, I do watch a number of shows on Netflix or Hulu instead of regular TV because I do not always have time to watch it when it comes on TV. If Nielsen and Adobe are able to track the ratings of shows online, I think it will have a large impact on advertising companies because it is a growing phenomenon that is only getting bigger.
Works Cited
Suciu, Peter. "The Ratings System That Could Change the TV Industry Forever." Forbes 23 Oct. 2014. Web. 2 February 2015.
Hogan, Dwayne. “How Do Nielsen Ratings Work?” CableTV.com, 19 Feb. 2013. Web. 2 February 2015.
I have to agree with these claims that in many regards the Nielsen tracking system has been outdated and needs to be replaced in a new media landscape in order to properly track audiences viewing habits.
ReplyDeleteIn his article Peter Suciu acknowledges that Nielsen has finally implemented a ratings system which takes into account streaming features such as Netflix, Hulu and HBO Go. (Suciu) A new system like the one Suciu wrote about seems absolutely imperative since many consumers are beginning to completely forego traditional cable services in lieu of using online streaming services and over-the-top features as well. Suciu makes the point that historically Nielsen only monitored television sets which were located in the family room. The problem with he addresses is that it does not take into account consumers who streaming a television show using an over-the-top service on a computer. (Suciu)
I thought the personal experience Jacob mentioned about his family deciding to completely get rid of their cable service and switch exclusively to streaming services is a good indication about how many other consumers may feel as well. Considering that cable packages can be very expensive and contain lots of content means that they may not be as practical for many audiences anymore. The rise of streaming services means that consumers now have the ability to transition away from cable. However, as mentioned in the original post that this is problematic as audience analytics have not until recently taken into account online television viewing.
Another major point I agree with is the serious implications that a poor ratings system can have on the television industry. If ratings services, like Nielsen, are not accurately forecasting audiences viewing habits then it can have serious implications. Suciu mentioned that ratings information is imperative for networks to decide which shows to keep on air and how to determine the costs of advertising space. A ratings system which does not account for the new platforms in which consumers are viewing television cannot accurately suggest the popularity of a particular program. (Suciu)
The new ratings system developed by Nielsen and Adobe may be what is necessary to start accurately seeing numbers which incorporate streaming viewership now that many are turning to these services.
However, it seems that a lot of this new data collection techniques and systems will take time to be implemented effectively and show accurate ratings information. In an article Tony Maglio wrote for The Wrap, he mentions that Nielsen is also colluding with Facebook in order to match and collect more demographics data, however, mentions that a Nielsen executive says it will be “very gradual” and that it is not really possible to precisely predict when ratings will change. (Maglio)
I believe that by the time that new and telling ratings information is revealed the media landscape will be much different as streaming services will have seized a larger share of the TV market.
Maglio, T. (2014, July 8). Nielsen Touts Mobile Ratings Ready in the Fall, Implementation Ball Is in Clients’ Court. Retrieved February 3, 2015, from http://www.thewrap.com/nielsen-touts-mobile-ratings-ready-in-the-fall-implemenation-ball-is-in-clients-court/
Suciu, P. (2014, October 23). The Ratings System That Could Change the TV Industry Forever. Retrieved February 3, 2015, from http://fortune.com/2014/10/23/adobe-nielsen-tv-ratings-system/
Colten Lucas
ReplyDeleteI agree with the fact that the normal TV set is dying from both personal and statistical views. Over the previous years ratings that face television shows through cable have been decreasing and people are mostly known do use different types of contents that are covered through online streaming and all types of different devices.” Nearly 5 million cable TV subscribers have gone elsewhere in the last five years. The number of cable TV-only subscribers remaining could sink below 40 million later this year, according to this data from ISI Group, an equity research firm” (Edwards).
These non-cable devices have had a huge impact on television because they bring a more narrow opportunity for peoples characteristics towards TV shows or more personal interest. Although Nielsen’s rating calculation has been discovered as inaccurate in the past, its new partnership with Adobe will bring a better chance for TV show ratings and of course more survival for advertisers. The partnership will not only count ratings for shows watched on devices outside of the simple television/cable box but it will bring better access to users in advertising and generate more money for network companies. ” Declines in traditional TV viewing have us all searching for the audience, trying to explain the shift away from viewing and away from content. Increased opportunities for content discovery on digital platforms, through over the top services, or through media companies’ providing their content online, accessible across an array of devices, all provide a vast media playground for the consumer who is now in control of what they watch and when they watch it” (Nielsen).
People who consume television online will have a better opportunity towards advertising and are able to have a more narrow advertising target towards their personal choices. One of the main reasons people are choosing to use these different devices and services outside of cable is time efficiency. People who might not have time to watch television since its based on the companies schedule to launch these shows, will be able to use and consume there television whenever they want on these devices, like Netflix or Hulu. As a non-cable user, I have not watched a show during its regular time schedule in probably 2 years.I watch most of my shows when I feel like watching it or if I want to binge watch. The whole point of me doing this is because I am that type of person and these services give me a more personal choice rather then for an example, watching one episode a week on Sunday nights. This partnership will have a huge help towards bringing television back to normal towards ratings and advertisements views.
Works Cited
Edwards, Jim. "TV Is Dying, And Here Are The Stats That Prove It." Business Insider. Business Insider, Inc, 24 Nov. 2013. Web.
“The Total Audience Report, December 2014” Nielsen.com. Accessed 26 Dec. 2014. Web.