Do TV Streamers Fly Under Nielsen Ratings’ Radar

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Do you binge on Master Chef? Hooked on Hollywood Game Night? Can’t get enough of Limitless? Viewers in the Internet Age pledge allegiance to shows with faithful streaming and tweeting. But how does this On Demand environment affect TV ratings?

In our age of data harvesting, streaming carries surprisingly little weight as networks stick with an old-school barometer for life-giving numbers: Nielsen ratings. And those can’t necessarily take into account hours viewers spend streaming.

South Carolina mom Cindy McCrain says she streams Bates Motel and Blacklist. She isn’t concerned about whether her streaming hours count toward the ratings for her favorite shows.

Cindy might not be concerned – but if networks can’t account for streaming activity like hers, those favorite shows might get canceled. Millions of viewers on Hulu or Netflix don’t figure in Nielsen ratings.

Nielsen method at work for more than 50 years

Nielsen, an information and measurement company, began tracking TV viewership in 1950. TV’s pre-cable era lacked the complexity the company faces today. Nielsen chose families at random using what it refers to as ‘proven methodology,’ to help track viewing data.

Nielsen calls its sampling a ‘cross-section’ of American viewing habits, and it has made changes to adapt to the shift away from traditional TV. But some metrics can still be complicated to pinpoint.

Nielsen can track time-shifted viewing, it says. That refers to consumption of recorded programming. It can do so, though, for only seven days after original broadcast. What of the binge watcher who remains isolated from spoilers on the street and in social media, then knocks a season out in a TV marathon day?

Sweeps periods take place four times a year. Sweeps is a two-week period in which data collected sets ad rates for TV shows. Nielsen relies on 2 million paper diaries from participants for some of this data. It calls on third-party surveys to determine which shows rate well on portable devices.

With this model, can Nielsen still provide an authentic picture of TV viewership?

Phil Baker writes for the website Tech Opinions. He detailed his family’s experience as a Nielsen family in a recent post. He wrote of the bulky devices, like pagers, that Neilsen provides. They’re to be worn non-stop to track viewing activity.

His post raised questions of gender bias and an incessant email and phone contact from Nielsen, asking family members to wear their devices more often.

“When I now look at Nielsen ratings,” Baker wrote, “I have a lot less confidence in their numbers.”

What’s at stake?

Nielsen’s data determines which programs draw the highest ad rates. Networks decide programs’ fate based on Nielsen data. Higher Nielsen ratings result in higher ad costs for that show. Higher ad costs leads to greater profit for TV networks.

This makes TV execs happy – happy enough to renew your show for another season. Lower Nielsen ratings drop the price of ads during that show. TV execs hate to lose money. They’d rather cut the show in favor for one with more earning potential – or move the show to a less-prominent time slot.

Collecting viewers isn’t enough to save a show for another season. It depends how well a program performs against others, too – or potential shows for that time slot.

Nielsen doesn’t reveal how many Nielsen families exist. estimates 50,000 Nielsen families in the U.S. Nielsen, on its website, placed the total American TV homes at 116.4 million. That works out to a fraction of 1% of American households.

Show producers can’t lean on seasons of relevance, either.

The 2016 chopping block included favorites such as Castle (ABC) and The Good Wife (CBS). Poor Nielsen ratings played a role in their cancelations.

What’s next?

A New York Times article says $70 billion in advertising hangs in the balance. That revenue is directed by Nielsen ratings. TV executives fear that billions of streaming hours aren’t being counted on platforms such as Amazon, Hulu, and Netflix.

Linda Yaccarino is NBCUniversal’s ad sales chief. At the CES trade show this year, she questioned Nielsen’s ability to provide accurate results. “Imagine you’re a quarterback,” she’s quoted in the aforementioned Times article. “And every time you threw a touchdown, it was only worth four points instead of six.”

Many companies have tried – and failed – to topple Nielsen from their place of authority.

A dual effort might be next up. Data-collecting companies Rentrak and comScore, who specialize in tracking viewership through digital media and set-top boxes, recently merged. They have their sights set on becoming the new king of ratings data.

Commercial-free streaming: the silver lining

Data collectors stand poised to upset the rank and file Nielsen established more than 50 years ago as the industry authority. But it’s not as simple as determining who is watching what shows, on what devices, and when.

Some streaming services now deliver content commercial-free, which takes the focus off ad revenue altogether. Networks great and small are producing exclusively stream-able content – and in some cases, canceled shows can get a second chance on streaming services.

In short, no matter which direction ratings science goes, there’ll always be something to watch.