Why Are US Cable Ratings Falling? Getting Back to Win-Win for Programmers, Advertisers and Producers!

Ratings for the US unscripted network category have fallen recently.

Why?

  • Are viewers fatigued with me-too Reality-based schedules?
  • Or have ratings services, particularly Nielsen, failed to count viewers who have shifted from linear TV to a variety of VOD and 2nd screen options?

John Morse is president and chief strategist at Byron Media, a New York-based media research consulting company. He is a highly valued partner of my consulting practice.

John is optimistic about a ‘win-win’ future.

  • He pushes back on the doom-and-gloom mood shared by many in our unscripted niche.
  • He argues that new audience measurement tools will capture the total viewing of programs, bolstering advertising sales and profitability.

Here is John Morse’s analysis of the situation. His interview was recently published in MediaLife.

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Why has it taken so long for Nielsen to catch up to “the new reality” of TV viewing?  

Conservative Model

  • Nielsen has been conservative in making changes to its national ratings service even though it’s been a focus for discussion for years.  They need to beta test changes in sampling and methodologies before implementing to make sure that all their constituencies are in agreement.  They don’t want to jeopardize their credibility in providing ad sales currency.
  • Nielsen clients have diverse agendas and sometimes are in conflict with each other.  For example, agencies want lower prices for ads while programmers want higher prices to spike revenue.
  • Changing the data could lead to either winning/losing.  This puts Nielsen is a difficult space.

Financial

  • Another reason Nielsen was slow is because the private equity investors that bought the company used borrowed money: it was a leveraged buyout.
  • Prior to the IPO, much of the company’s resources went to paying down debt.  The owners were more concerned with efficiency and downsizing than with keeping up with changes in the marketplace.
  • This put them in the hole and allowed competitors like Rentrak to gain market share.

How does this impact the jobs of media buyers and planners? Are they trying to guess ratings based on digital sources in order to make the right choices?  

  • At this time, most buyers/planners depend on Nielsen national ratings for TV and comScore online ratings for the web.
  • The ratings for the individual media aren’t an issue.  The media buyers and planners are having to estimate the reach and frequency across the media.  They don’t know the reach and frequency for the total ad campaign, whether they’re hitting people with ads too few times for the ads to be effective, or too many times producing waste.

What would you like to see from the new ratings Nielsen plans to offer?  

  • I’d love to see larger samples based on a single source that combine all digital viewing venues.
  • Ideally, a total reach and frequency across all media is the goal.

SVOD now has a 40% penetration in the US. This is a 19% increase in the past year. (Nielsen Media Research, 3Q14.

How could these new ratings be of assistance to media people?  

  • They would understand the total audience delivery for programs/ads and be able to calculate national video audience GRPs (Gross Ratings Points).

You note there have been a lot of changes in technology over the past three years, such as a rise in telco homes and a decline in wired cable homes. What development do you find most interesting and why?

  • The shift from traditional linear TV viewing to mobile wireless devices has been very rapid.
  • Although most TV viewing is still traditional at-home, the rate of change over the past year has far exceeded my expectations.
  • Also, the increase in SVOD usage (over-the-top) has surged and will continue to.
  • All of this puts more pressure on Nielsen to incorporate these new viewing venues into the national ratings.

Do you think the current Nielsen ratings truly reflect what people are watching? Why or why not?  

  • The Nielsen ratings currently are missing the viewing of many video options outside of traditional at-home usage.
  • This is especially true for the population under age 50, although the 50- to 70-year-old generation is rapidly catching up.

Do you think there is one network that is being impacted most by Nielsen’s inability to measure digital options?  

  • I believe that networks that focus on delivering teen and young adult audiences have been most impacted by an undercount of the new viewing options.
  • That would include Nick-At-Night and Adult Swim.

How do you think the new ratings could impact ad spending?   

  • As the new venues are measured and integrated into the national ratings, it will increase ad spending on overall TV since the ratings will rise.
  • It will be a win-win for everyone: Nielsen continues to dominate the ratings currency business; programmers see higher ratings and related revenue; advertisers get a real total reach/frequency for ads that justifies their spending.

From MediaLife, January 12, 2015