After Calling Cord Cutting 'Purely Fiction' For Years, Nielsen Decides Just Maybe It Should Start Tracking Amazon, Netflix Viewing
from the selective-hearing dept
For years, we've discussed that while cord cutting is a very real (though slow growing) phenomenon, the broadcast and cable industry has done its best to pretend that it doesn't exist. For years, the industry blamed the slowly defecting users on the recession or the sluggish housing market, and when the data failed to support that claim, they began going out of their way to argue that these users were middle-aged losers living in mom's basement and therefore irrelevant. In fact, data shows that cord cutters are usually young, gainfully employed, and highly educated users who make plenty of money.This silly denial included the TV ratings measurement firm Nielsen, which for several years insisted that cord cutting was "purely fiction." When it became clear that cord cutting was very real, Nielsen didn't admit error. It simply stopped calling it cord cutting and started calling it "zero TV households."
Except here's the rub: all that time that Nielsen was downplaying cord cutting, it wasn't bothering to actually measure it. It was only late last year that Nielsen began to at least try tracking television viewers on PC, tablets and phones (something still not fully implemented), and the firm only just announced last week that it would soon begin tracking Netflix viewing (did I mention that it's 2014?). Shockingly, guess what the preliminary Nielsen data leaked to the Journal indicates?
"The Nielsen documents also contain some of the strongest data to date suggesting that time spent on these streaming services is meaningfully eating into traditional television viewing. Television viewing is down 7% for the month ended Oct. 27 from a year earlier among adults 18 to 49, a demographic that advertisers pay a premium to reach. Meanwhile, subscribership to streaming video services has jumped to 40% of households in September, up from 34% in January, Nielsen found. That is a rate of growth that advertising agency executives who saw the Nielsen document said they found shocking. Netflix accounts for the vast majority of the viewership."That's on top of the small but meaningful net loss of 150,000 pay TV customers last quarter; including the first ever third-quarter net loss for companies like DirecTV. Nielsen, like broadcast executives, has a vested interest in propping up the legacy cash cow and burying its head squarely in the sand, hoping the obvious cord cutting phenomenon is akin to yeti and unicorns. We've seen an increasing number of top telecom and cable industry analysts who spent years insisting cord cutting wasn't real, only to sheepishly and quietly change their tune over the last year. Now that Nielsen's actually bothering to measure the data, it should be only a matter of time before it too admits it was wrong, right?
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Filed Under: analytics, cord cutting, measurement, metrics, online streaming, online video
Companies: amazon, netflix, nielsen
Reader Comments
The First Word
“I'm just going to leave this here
"Except here's the rub: all that time that Nielsen was downplaying cord cutting, it wasn't bothering to actually measure it."This is a perfect fit for one of my favorite quotes -- one that has wide and frequent applicability, unfortunately:
"The first step is to measure whatever can be easily measured. That is okay as far as it goes. The second step is to disregard that which can't be measured or give it an arbitrary quantitative value. This is artificial and misleading. The third step is to presume that what can't be measured easily really isn't very important. This is
blindness. The fourth step is to say that what can't be easily measured doesn't exist. This is suicide." --- social scientist Daniel Yankelovich describes the "McNamara fallacy". Quoted by Jay Harris, former publisher of the San Jose Mercury News, in a speech explaining why he resigned his post. [http://www.poynter.org/centerpiece/harris.htm]
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Cables prices are up, while quality is down
But ghost stories on the history and science channels? Unending repetition? No ala carte slections? Prices that go up in significant multiplications of the inflation rate. More and more commericials?
If alternatives had not been available by now, I would have put the TV in storage, or used it as a monitor. The Cable networks have nothing to off. Now I get a couple of premium channels with Roku that come to about $10/mo and VOIP for $12. Unfortunately the net is still from the cable company, and I get 3-18Mbs for $65. Still a lot better than the $190 I was paying. More importantly, stuff I can actually watch,
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Re: Cables prices are up, while quality is down
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If Nielsen starts proving that people aren't going to cable and broadcast anymore, but are instead going to streaming... where is the ad revenue going to go?
As long as the data stays buried, ad revenue keeps flowing through the traditional channels.
And as for streaming -- there's no demand for Nielsen's services there, as the streaming companies already know who is streaming what and when. And THEY set the ad pricing for their services.
The eventual outcome of this entire situation is that traditional broadcast will no longer be able to fund all the shows people want to watch, and streaming services will have to start funding it -- and the old services want to buy some time to position themselves to BE the streaming services before that happens (see the current attack on NetFlix in Canada for the first shot across the bow).
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What I don't get is why Nielsen doesn't record ALL video content in its surveys - Netflix, Youtube, library rentals, phone, etc. What good does it do them to ignore any of it, and how hard could it be to accommodate it? And why would the networks want inaccurate information?
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There is a need for an independent auditing agency, though, to make sure that the numbers being reported by the streaming companies are actually accurate. Nielson could fill this role.
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"zero TV households"?
/Nope, not even at $0.01 a month introductory/try-out price for cable. I don't want to encourage or support the dreck that's on cable - 'reality' TV, the same friggin' episode of BBT twelve times a day on twelve different channels, and the Golf Channel(wtf?).
//Do have Netflix, though. And TWIT. And an antenna.
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Re: "zero TV households"?
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I'm just going to leave this here
This is a perfect fit for one of my favorite quotes -- one that has wide and frequent applicability, unfortunately:
"The first step is to measure whatever can be easily measured. That is okay as far as it goes. The second step is to disregard that which can't be measured or give it an arbitrary quantitative value. This is artificial and misleading. The third step is to presume that what can't be measured easily really isn't very important. This is
blindness. The fourth step is to say that what can't be easily measured doesn't exist. This is suicide." --- social scientist Daniel Yankelovich describes the "McNamara fallacy". Quoted by Jay Harris, former publisher of the San Jose Mercury News, in a speech explaining why he resigned his post. [http://www.poynter.org/centerpiece/harris.htm]
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Re: I'm just going to leave this here
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http://web.archive.org/web/20021021013139/http://poynter.org:80/centerpiece/harris.htm
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https://www.wsj.com/articles/nielsen-to-measure-netflix-viewing-1416357093
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So, something that's blindingly obvious to most of their target demographic and has clearly been on the cards for years is "shocking" to them? They deserve their losses.
On the other hand, they've probably just been lied to by the idiots in charge of the networks. The real issues facing the industry have been ignored so long as they can hold on to dated business methods and blame any losses on "piracy" rather than fixing themselves.
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The problem is...
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Some of those channels are free basic channels.
So for about the price of 200 channels, I can watch the 1 or 2 left that I can't get online or over the air.
I don't channel surf, I don't watch idly... I set my DVR to record my shows, watch, delete, do something else. If I lost cable TV tomorrow, I wouldn't miss it.
I imagine similar scenarios for other people.
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Slow Growing Phenomenon
Switching from the reliable horse and buggy to noisy, smelly, unreliable automobiles that can break your arm when cranking them. Check.
Switching from newspaper and books to radio. Check.
Switching from radio to television. Check.
Switching from snail mail to e-mail. Check.
Switching from land line phones to cell phones. Check.
Switching from printed books to e-books. Check.
Switching from brick and mortar stores to online stores. Check.
Switching from Microsoft Windows to mobile OSes like Android or Chromebooks, for uses where it makes sense. Check.
Switching from broadcast and cable tv to internet streaming . . . um, this is not happening. It will never happen. You are crazy . . . um, are you some kind of a radical criminal pirate terrorist or something?
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This was valuable and important because it's otherwise very difficult to know how many people are watching a broadcast.
But with Netflix and similar services, the count of viewing devices is known. Even the type of device is known.
Nielsen's business model is under far more threat from this transition than the broadcasters. Of course it's in their best interest to pretend it doesn't exist when reporting to those that pay them.
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Nielsen could still provide value by collating the information from other sources, providing valuable data services, analysis and ways to provide intermediary services between networks and their advertisers. They still have a place, and a potentially valuable one. It's just not strictly the way they've been doing business so far.
In other words - when you get down to the basics, it's yet another example of dinosaurs not wanting to change their ways while they still have the cash cow in their reach.
At least Nielsen seem to be starting to realise there's no choice other than to change, rather than fight tooth and nail in the courts to keep their old business model.
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Real Life Cord Cutter (well almost)
Before we cut cable, tv was always on some cable garbage, pawn stars, parking wars, storage wars, some old movie for 20th time. Those basic fill garbage cable junk shows! -- cost of 190-200$ a month w/cable,net,phone from comcast Xfinity.
Cut cable, HD Antenna for local channels. No Netflix though(delays!), lots of use of network websites to view.
Guess What - haven't watched Pawn Stars in 2 years, no one will intentionally watch those garbage cable fillers.. amazing what they don't miss!! Bill is down to 100$ a month for the cable business account. I did keep phone due to the nature of my business. W/O phone would be under 80$ a month vs 190-200$ and I get better viewing experience, on my own time, less fill. I do have HuluPlus! but am thinking of cutting it. Even if it cost the same I wouldn't go back, the time shifting alone is worth it.
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Cable prices are not up
All of them have been about the same price for at least the last 5 years.
100+ for Internet.
10 to 40 for cable TV
5 to 20 for phone service
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Re: Cable prices are not up
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Rube Goldberg way of doing things
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This is about Nielson trying to stay relevant.
That's the thing about digital, it already has viewership numbers in high detail, real numbers accounting for every view and location. The digital medium enables targeted slipstream advertising - more money returned for the advertising dollar spent and the very targeted consumers.
Nielson is trying to stay relevant, wants to be the clearing house for all viewing statistics. The thing is they like broadcast operate using outdated business models related to digital, they still don't get it.
Netflix, Prime, iTunes none of these need Neilson to sell advertising space, advertising is already built into their platforms, which they tightly control and manage and even limit because it's not how they make money, it's value add and subscribership or direct sales of the program watched (DVD, BluRay, Digital Locker|Movie cloud) is their bottom line.
What value does Neilson offer to companies like Netflix or iTunes or Amazon which already have effective digital business models and advertising that fits into those models to sell goods?
This isn't about Netflix or Amazon or iTunes or Googles premium play for Youtube, this - from my perspective - is about a dinosaur looking to find relevance in the new world and trying to bring the present into the past.
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Just finished a week as a 'Nielsen home'
Nope. They sent pretty much the exact same physical booklets, with a few extra columns to document the viewing of time-shifted programs via DVR. They did send a link, but it was to a site dedicated to explaining how to fill out the booklets.
So Nielsen not only has their heads in the sand concerning the implications and pace of today's technology, but are also actively ignoring it when it could assist in doing their job more accurately and efficiently. Yikes.
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