Today, Reuters has an article pointing to another nail in the coffin of the way things use to be, just aren’t going to be the way they will be in the future. Tell me something I didn’t know, right?
New media upends TV ratings system
By Basil Katz
NEW YORK (Reuters) – The explosion of ways people watch television is confounding the media industry, which has relied for decades on the Nielsen ratings but now must adapt to the realities of the Internet and on-demand video.
Americans are watching more TV than ever — an average of 151 hours a month — on more networks and in increasingly diverse ways. Industry heavyweights and analysts are calling for a new ratings system to keep up.
At first there was a “crisis in measurement” due to the scarcity of data, said Alan Wurtzel, president of research and media development at NBC Universal, which is 80-percent owned by General Electric Co.
But now, he said, content providers are “drowning in data.”
Broadcasters, content providers and advertisers including consumer products giants Unilever and Procter & Gamble Co are all trying to adapt.
“In the past one-and-a-half years there has been a geometric increase in consumers’ access to the Internet for video, and the metrics market has not kept up,” Wurtzel said.
Though little more than 2 percent of television viewing is done on the Internet, Hulu.com, which combines video from 150 broadcasters on a single platform, has seen its audience grow fourfold in the last year, according to The Conference Board/TNS. Hulu is a joint venture owned by media giants NBC, News Corp and The Walt Disney Co.
COALITION TO SEEK BETTER METRICS
This month 15 of the biggest broadcast network companies, advertisers and media-buying agencies formed the Coalition for Innovative Media Measurement (CIMM) to help improve audience metrics.
CIMM is a LLC composed of 15 voting members, from Unilever and Procter & Gamble to MTV Networks and the Omnicom Group Inc.
Each has contributed $100,000 for a minimum two-year engagement.
CIMM is expected to seek two bids from ratings and data companies: one to conduct set-top box research, the other for cross-platform viewing.
Thanks in part to the conversion to digital cable, many Americans are accessing their favorite shows through set-top boxes provided by cable or satellite companies.
This has led to an explosion of new audience data from half a dozen companies that mine set-top boxes for viewer habits.
Factor in TiVo and video-on-demand systems with upcoming Internet video portals OnDemand Online by Comcast Corp or Time Warner Inc’s TV Everywhere — and getting uniform data becomes that much more difficult.
“With more than 500 channels, and linear and nonlinear viewership, we’re far from the three networks that captivated 90 percent of the viewership 30 years ago,” said Alan Gould, a media analyst at Natixis Bleichroeder.
NIELSEN SAYS UP TO DATE
But Nielsen ratings still hold sway over the buying and selling of advertising.
Major broadcast networks spend roughly $1 billion dollars every year to get ratings from Nielsen, estimates Larry Gold, who publishes Inside Research, a newsletter on the market research industry.
“It has control of the marketplace,” he said.
This is an often-heard gripe against Nielsen, which says it has made significant investments in acquisitions, infrastructure, and research that address the new ways people use media.
As for CIMM, Susan Whiting, chairwoman of Nielsen Media Research, said, “We share all of the objectives of the leaders of the coalition, and we are interested in hearing more about their plans.”
But for Tracey Scheppach, a senior vice president at SMG Exchange, an offshoot of CIMM member Starcom MediaVest, part of France’s Publicis Groupe, Nielsen is partly to blame for the metrics lag.
“While audiences have fragmented, Nielsen’s panel size has not kept up,” said Scheppach. That has led to “dumbed down, inaccurate data,” she said.
For instance, broad audience categories such as women between the ages of 18-49 are hard to translate into targeted advertising.
“There’s bound to be a difference between an 18-year-old woman in Manhattan and a 49-year-old woman in some rural area,” says Alan Gould. “There has been no matching of consumer behavior with the ads.”
(Editing by Daniel Trotta and Xavier Briand)
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