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Summary:

After enjoying a ratings monopoly during television’s first six decades, Nielsen increasingly finds itself challenged by upstart competitors…

TV Ratings
photo: Flickr/Midnight-digital

After enjoying a ratings monopoly during television’s first six decades, Nielsen increasingly finds itself challenged by upstart competitors as the TV research game evolves to more accurately measure audiences spread across digital viewing devices. The latest incursion came Friday, when research firm Rentrak agreed under a newly signed longterm deal to supply an expanded range of metrics to Crown Media Holdings, operator of the Hallmark Channel.

Crown said it will now a receive a full subscription to Rentrak’s television measurement services, which employ feedback from digital set-top boxes in 19 million American homes. According to Ed Georger, Crown Media Holdings’ executive VP of advertising sales, the move puts his company closer to day in which it sells its commercial time based on metrics other than Nielsen’s.

“We’re in the early stages of doing that,” he told us. “There’s a lot we still need to explore.”

The move to arbitrate the price of advertising with an additional ratings data source comes after high-profile voices in the TV industry — most notably, Viacom (NYSE: VIA) CEO Philippe Dauman — have leveled concerns regarding Nielsen’s methodology, which uses a much smaller sample of 25,000 homes. Nielsen drew contention from Dauman when it reported year-over-year viewership drops of more than 20 percent for Viacom’s Nickelodeon kids channel in the fourth quarter.

However, a report comparing Nielsen and Rentrak measurement of Nick’s November performance revealed significant discrepancies. For example, Nielsen reported a whopping 22.6 percent viewership drop for the channel’s Monday-Friday lineup, while Rentrak said it was only around 12.7 percent.

Blogged BTIG Research analyst Richard Greenfield: “Beyond illustrating that Viacom, and more importantly, Philippe Dauman are not crazy, the more important takeaway from the data discussed above is that content creators, ad buyers and brands should all be utilizing multiple data sources versus simply buying ad time solely on Nielsen metrics alone.”

Nielsen is facing pressure from other research companies besides Rentrak. Last month, NBCUniversal (NSDQ: CMCSA) commissioned Google and comScore to develop a multi-platform audience measurement tool for the Olympics that would follow viewers across the full range of usage devices.

  1. Richard Greenfield and the author miss the elephant in the room. Even though Nielsen might have overestimated the drop for Nick, in this ‘best’ case with Rentrak measurement it’s still almost 13% – which is huge. So, Viacom and Philippe Dauman might not be ‘crazy’ but they should still be worried.

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