Nielsen: the past, the present, but not the future of TV

February 22, 2013

This week, Nielsen announced that its viewership numbers will include the TV shows that get to the living room via Internet-connected TVs rather than through antennas or a cable/sat box. It’s a modest acknowledgement of the cord-trimming trend by which viewers are turning to non-traditional sources for “TV” such as Netflix, Amazon and Hulu.

That’s good news, as far as it goes. But only a thimble’s worth. Nielsen, television’s quantifier of record, isn’t going nearly far enough to keep up with the times. Not accounting for rapidly evolving viewing habits and methods is a greater threat to the veracity of Nielsen’s numbers than age-old criticism of its method of computing them. 

Video consumption from Internet sources may still be just a blip – it’s at 4.2 percent now, though it’s growing rapidly. But consumption on devices that are not TV sets – tablets, smartphones, computers ‑ is also happening, with perhaps an even more rapid rate of growth. A recent study by The Diffusion Group (TDG) predicts that 10 percent of TV watching will be on tablets within four years. Nielsen itself reports that about 40 percent of Americans use a tablet or smartphone as a second screen, while watching TV, at least once a day ‑ and 80 percent at least once a month.

Sales of TV sets are in decline as tablets and smartphones fly off the shelves. The living room war is being won by mobile devices, which aren’t even on Nielsen’s radar.

The crux of Nielsen’s business model is in selecting representative households — Nielsen families — from which to extrapolate viewing patterns. Nielsen families agree to have a special box attached to their TV sets that can record viewing habits. There are only 22,000 of these families, carefully chosen to create a polling sample that represents 114.2 million U.S. households.

The Nielsen ratings, which determine whether a TV show is successful and renewed or a flop and canned, are all based on this polling sample. Advertisers set rates on it. The entire TV economy is based on it. 

When Nielsen developed the sampling method in the 1950s, the world was a very different place. All TV shows entered our households over the air. They were seen on TV sets that could only receive, not send, information. Everything was live. If you missed a show, you might get a second chance at a rerun months later; there were no home DVRs or on-demand archives. There was no way for TV viewer habits to be passively monitored. There were no social networks, no blogs, no Twitter where spontaneous water cooler conversation could flourish. There were no portable TVs or mobile devices like tablets and smartphones that deliver TV without power cords or antennas. 

It has not been the ’50s for a very long time. Tablets are perfect flat-screen TVs that go anywhere and do a million other things — we even use them as TVs around the house with apps provided by our cable companies and channels. Broadband access to the Internet is arguably ubiquitous, making it possible to watch TV in your car (rear-seated passengers only, please). Over-the-air reception is going the way of land-lines phone — set-top boxes and gaming consoles and devices designed to stream programming, like the Boxee Box, Roku and Apple TV, are becoming increasingly common, and cheap. Programmers in the era of HBO have been bypassing the networks for decades, and now they are even bypassing TV ‑ witness original programming like House of Cards, paid for and delivered by Netflix ‑ which you can’t even watch on your TV set without special equipment. 

It is easy to imagine that all the connected devices we use to watch TV and video could report “anonymized” information to a clearinghouse (Nielsen, even!) whose sole purpose is to collect data about viewership from every conceivable source, indifferent to the device you are using, whether live or DVR’d, from wherever the show is emanating. The rich metadata that could result include devices used, where people start and stop watching a program, what times of the day certain programming flourishes, etc.

Scared of being “watched” while you watch all the time? Too late. Facebook and Google are constantly keeping tabs on what you do, if you let them — and billions of people are fine with that (or are blithely indifferent). The trade-off is better and free services that you want and can use.

Don’t think it’s possible to create a crowdsourced database of everything everyone watches? TiVo has had the capacity to measure second-by-second trends for a decade. That is how they knew that Janet Jackson’s wardrobe malfunction in Super Bowl XLVII in 2004 was the most replayed moment ever. The company already provides supplemental ratings information. 

This isn’t just about saving your favorite TV program. When Nielsen reported that President Barack Obama’s 2013 State of the Union address had the smallest TV audience for the annual speech since 1990, it shaped the political narrative. But everyone who might have watched on devices or by Internet streaming or who didn’t bother because they knew the live-blogging on Twitter would be excellent and that the best clips would be shown the next day by MSNBC, Fox and CNN weren’t counted. And since none of that was possible 23 years ago, Nielsen’s misleading number tells us more about our indifference to TV than to politics. 

Nielsen’s decision to add 160 homes to the 22,000 Nielsen families to measure Internet-delivered content — starting no sooner than next September — is very little, very late. And it is quaintly TV-set centric. Measurement of, say, iPad viewership is “sometime in the future,” a Nielsen spokeswoman told Brian Stelter of the New York Times.

Even in the Internet age, television remains a remarkably popular medium. It hasn’t lost its punch because programming continuously evolves. But the business of television hasn’t changed much since the Golden Age of TV more than a half century ago. It remains mired in the past because decisions are based on the perpetuation of imperfect information. And the worst part is, it doesn’t have to be that way.

PHOTO: REUTERS/Neil Hall

3 comments

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I can’t believe their archaic method is still relied upon today for accurate viewership information. 22K people extrapolated over the entire population? Reminds me of election polls.

Posted by tougar | Report as abusive

I am using Apple TV to watch the music programme from http://www.medici.tv. It is easy to navigate and to control with an iPad. Although the image quality is not satisfied, the sound is acceptable. It is cheap and valuable and the music contents are abundant. I believe it is a miniature for the future TV. The future of TV shall be manifold, from a variety of sources to satisfy different people’s needs. Don’t dream one channel covers all. Obviously, many businesses are compete each other for the ultimate portal to the channels of contents. Who controls the portal, controls the content delivery.

Posted by gee.la | Report as abusive

It was well over ten years ago when talking with one of the Viacom Partners that he pointed out that young people were then spending more time on the InterNet than regular TV. Now, that applies to the majority of people, even seniors to some degree.

Nielsen is becoming somewhat like newspapers.

Posted by ptiffany | Report as abusive