Nielsen and the TV Industry: The Blind Leading the Blind

Bad decisions are being made with bad data, and it could be costing the TV industry billions.

In the TV business, ratings are everything.

• They determine how much networks can ask for ad time.
• They factor into what subscribers pay for each channel in their cable lineup.
• They decide which shows live or die at the end of each season.
• Low ratings have even become our president’s barb of choice when attacking cable news coverage.

As the cornerstone of the economics of the television industry, you might rightfully expect Nielsen ratings to be rock solid. And they were, for decades.

But as any consumer can tell you, the way that we watch television has changed rapidly over the past 5 to 10 years.

Once ubiquitous cable TV has given way to a web-first media world, making the view offered by Nielsen ratings dangerously incomplete.

Unfortunately for TV execs, that view is all they’ve got!

Device-Driven

That big box in the living room (which Nielsen’s measurement boxes are connected to) is no longer the first choice for video viewing.

Nielsen ratings are down across the board, while statistics show consumers watching more video than ever.

There’s only one explanation: they’re watching on devices where Nielsen isn’t measuing: PCs, smartphones, tablets, various media devices like Chromecast and Roku.

As the TV industry drives into Nielsen’s blind-spot, that same ratings data is still being used to inform major programming descisions.

They’re still using the same data, even though they know it’s becoming less and less accurate.

Behind the Times

What’s perhaps more surprising than the continued reliance on faulty data is the venerable ratings agency’s response, or lack thereof.

The shift to online video didn’t happen overnight, and Nielsen has often spoken of plans to start measuing these new mediums.

Clearly the networks are desperate for better data and have been pressuring the company to deliver. Some have even gotten tired of waiting and dumped Nielsen ratings entirely.

Even now, in 2017, news has broken that Nielsen’s long-awaited answer to these calls isn’t ready for prime time and is being shelved indefinitely.

From what they’ve seen, networks have described the product as “inconsistent” and “incomplete”.

Aggregation is the Answer

Nielsen’s failure is understandable. They aren’t omnipresent, in an age when anyone can pull up nearly any video, on any device, from anywhere.

Nielsen depends on hooking a measurement device of theirs up to a viewing device of yours.

Consumers already have all the devices they want or need. In order to measure viewership, that process needs to move, along with distribution, from closed networks and devices to the cloud.

The online video marketplace that will replace your cable box will also be as powerful a tool for measurement as millions of virtual Nielsen boxes.

FreeCast’s SelectTV is already able to capture a goldmine of valuable data for its network partners.

We can tell you not just what a consumer watches and when, but on what device and from what service.

The Full Picture

To make the right calls on programming, TV executives need all the data available to them. Nielsen will continue to be one piece of that puzzle.

Others, like Netflix, are notorious for guarding their own audience measurements. That’s a piece that networks could be forced to live without.

But online aggregators can form a layer on top of services including Netflix and many others, which are not about to cooperate with each other or with content producers looking for data.

By doing so, they’re able to offer networks a Nielsen-style glimpse at the elusive online audience for their content. With millions of subscribers, FreeCast’s sample size is large enough to produce confident numbers, many of whom are cord-cutters, a group often left out by more traditional measurements.

Remember: In the land of the blind, the one-eyed man is king.