After Missing Cord Cutting Trend, Nielsen Falls Apart

from the whoops-a-daisy dept

For years, we've noted how popular TV ratings firm Nielsen has turned a bit of a blind eye to cord cutting and the Internet video revolution, on one hand declaring that the idea of cord cutting was "pure fiction," while on the other hand admitting it wasn't actually bothering to track TV viewing on mobile devices. It's not surprising; Nielsen's bread and butter is paid for by traditional cable executives, and really, who wants to take the time to pull all those collective heads of out of the sand to inform them that their precious pay TV cash cow is dying?

Eventually, the cord cutting trend became too big to ignore, forcing Nielsen to change its tune and start acknowledging the very real trend (though they called it "zero TV households" instead of cordcutters). Broadcasters (especially those hardest hit by cord cutting) didn't much like that, and began bullying the stat firm when it showed data that didn't jive with the view a foot below ground. While Nielsen slowly improved its methodologies, it would occasionally back off on certain data collection and reporting changes if the cable and broadcast industry complained loudly enough.

Ironically, this fealty to wishful thinking has not paid dividends for Nielsen. Nearly every broadcasters in your cable lineup is expected to launch their own streaming service by 2022. Many of these companies (like CBS) have eyed ditching Nielsen because, they claim, it's charging too much money for a user tracking system that hasn't adapted for the streaming era. And despite attempting to use patent monopolies to retain its dominance as the source for TV viewership data, things simply have gone from bad to worse for the one time industry leader.

New reports indicate that after failing to find a buyer, the firm may soon be forced to resort to being chopped up and sold for scraps:

"Private equity giant Blackstone Group is dropping out of the Nielsen Holdings sales process — putting the future of the auction in doubt, The Post has learned. After months of kicking the tires at Nielsen, Blackstone has decided against making a final offer for the 95-year-old consumer research firm known for its TV-rating reports, sources told The Post. Separately, private equity firm Apollo Global Management, which began sniffing around the company late last year, is also losing interest, a source close to the situation said."

There's a lot of reasons for Nielsen's demise. The company is saddled with debt, and companies are tired of paying high rates for a service that doesn't adequately even measure streaming video subscribership. But one has to find it at least semi-ironic that Nielsen spent years delivering "everything is just fine!" missives to the cable and broadcast industry in the belief it would ingratiate itself to them, only to now find few friends as the 95-year-old consumer research firm tries to avoid a complete collapse.

Filed Under: cable, cord cutting
Companies: nielsen

Nielsen Using Patent Monopolies To Act Like A Monopolist

from the seems-a-bit-questionable dept

For many years, we've highlighted how patents are monopolies and they provide monopolistic power. Indeed, the founders of the US recognized this. James Madison was quite skeptical:

"But grants of this sort can be justified in very peculiar cases only, if at all; the danger being very great that the good resulting from the operation of the monopoly, will be overbalanced by the evil effect of the precedent; and it being not impossible that the monopoly itself, in its original operation, may produce more evil than good."

Jefferson was similarly dubious of the need for patents:

... generally speaking, other nations have thought that these monopolies produce more embarrassment than advantage to society; and it may be observed that the nations which refuse monopolies of invention, are as fruitful as England in new and useful devices.

Eventually, Jefferson was convinced to support such a system -- and even reluctantly ran it for a while -- but he did so with great concern about how these "monopolies" could hinder actual innovation.

Fast forward a couple centuries, and let's look at the case of Nielsen. You know, the company that "measures" freaking everything. Once synonymous with television ratings and "Nielsen homes," it has expanded into other entertainment measuring markets over time -- and has certainly had something resembling a monopoly during much of that period -- and it has often used patents to retain that monopoly. And this goes back a very, very long time.

In the 1940s, Nielsen worried about a competitor taking away its "exclusive" market and used patents to kill it off:

The challenge to Nielsen's meter monopoly was too real to be taken lightly. Charles Wolcott, a top executive of A.C. Nielsen wrote to Mr. Nielsen: "I fail to see how we can turn our backs on the possibility that RADOX could complicate our situation--that is, if RADOX continues to develop, we are no longer exclusively the proud possessors of measurement by electronic means." It did not take Nielsen long to move. RADOX was vulnerable on two fronts--patent and finance--and each front was quickly attacked. Regarding patents, it turned out that both parties had patents pending, and the U.S. Patent Office ultimately declared "interference" existed. Nielsen's major thrust, Sindlinger maintained, was to use the cloudy patent situation to chill the interest of the investor group in any financing help for RADOX.

Years later, Nielsen's son more or less admitted that his father talked investors out of supporting Sindlinger and the RADOX system:

A man by the name of Ralph Bard Sr. who lived in Chicago and had been Secretary of the Navy called on my father. He was considering investing in Sindlinger’s operation and asked my father for his opinion of the company. My father wrote him a letter concluding that Sindlinger’s device would not be a success. In short, in my father’s opinion, this would not prove to be a good business.

A little over a decade later, the FTC actually had to go after Nielsen for using its patents to pressure competitor Arbitron, leading to a consent decree:

A patent infringement suit brought by Nielsen also arguably deflected ARB from competing head-to-head with Nielsen in network television ratings with its Arbitron instantaneous audience measurement system in the late 1950s. More recently, to deal with measurement of cross-platform viewing, Nielsen has used acquisition to build its intellectual property portfolio and continues to use litigation to slow down its competitors.

While the outcome of patent disputes may be uncertain, litigation or licensing undertaken to protect and/or monetize patents does not itself present unusual legal reisk to the patent holder. Such risk does adhere, however, if the patent was fraudulently acquired or was leveraged to extend beyond its rightful metes and bounds. The FTC found Nielsen guilty of such misconduct leading to a 1963 consent decree. Two of Nielsen's business practices that violated the FTC Act were (1) the systematic use of patent proceedings "to discourage potential and actual competitors from developing and using... devices for... measuring... audiences... and has attempted to impede and sabotage the financing of these competitive efforts.

So what does something that happened more than 50 years ago have to do with today? It appears that Nielsen has continued to leverage this particular playbook. First, Nielsen freely admits that it holds a monopoly in the ratings game:

Neither party disputes that Nielsen exercises monopoly power over the television audience measurement services industry, both nationally, for the United States as a whole, and for 210 local markets

And it's still using patent claims to stifle competition. Back in 2016, Nielsen bought Gracenote for $560 million just three years after it had been sold for $170 million. Just what could have represented so much value for Nielsen? Well, just a couple months before Nielsen bought Gracenote, Gracenote had sued a company called Sorenson Media for patent infringement. Sorenson Media had an "automatic content recognition" ACR platform for measuring viewers of TV broadcasting -- exactly the market Nielsen wishes to maintain its monopoly over.

How did that turn out? Well, Sorenson declared bankruptcy last fall (in large part due to an incredibly stupid contract it had signed), but I'm sure the cost of a patent lawsuit didn't help. Oh, and in February, Nielsen bought up Sorenson's assets at firesale prices.

And that's not all. Last year another small competitor, ErinMedia, sued Nielsen, claiming antitrust violations and that Nielsen was using "predatory practices designed to prevent competitive entry by companies like ErinMedia." A few weeks later, the company announced that it was effectively shutting down, noting that Nielsen had "chilled" its ability to close an investment round.

Oh, and remember Arbitron? The company that was at issue back in the 1960s? Nielsen bought them a few years back, leading the FTC to put some conditions on the deal in hopes that it would not "substantially lessen competition." So far that doesn't seem to be working.

And that brings us to the latest Nielsen use of patents against an upstart competitor. Last fall, Nielsen sued upstart competitor Samba TV, claiming patent infringement. The patents at issue -- 9,066,114, 9,479,831 and 9,407,962 -- all are incredibly vague and generic, and appear to be the kind of patents that aren't supposed to be allowed in a post-Alice world.

As Samba notes in its motion to dismiss, nothing here should have been patented in the first place:

For centuries, families and friends have gathered for plays and concerts—and more recently, for television and radio programming. Most silently observe. But others, often because they are already familiar with the programming, offer commentary: about the director, the actors, or the scenes. Some react to the content in order to enhance it: a lawyer presenting an animation typically offers comments at preplanned moments; or a theater employee may need to adjust lighting or curtains at the conclusion of certain scenes. The process of recognizing parts of a video, song, or other content and reacting—either instantly or at a later time (e.g., during a commercial break)—is not patentable. It is an abstract concept involving the three main stages of memory: processing, storage, and retrieval. Alice Corp. Pty. v. CLS Bank Int’l, 134 S. Ct. 2347, 2356 (2014) (a “method of organizing human activity” is not eligible for patenting).

Gracenote’s patents claim abstract concepts without contributing any new inventive technology to achieve them. Instead, the claims merely use existing technologies—technologies Gracenote does not even claim to have invented—as tools to carry out the concepts. The ’114, ’831, and ’962 patent claims use identifiers, called fingerprints, to recognize portions of audio or video signals and trigger responsive actions at predetermined times during the playback, such as providing information about a scene at its conclusion. The patents, however, do not purport to have invented fingerprints or even an improved fingerprinting technique. Using known fingerprinting technology as a tool to perform the abstract concept of signal recognition and reaction is patent-ineligible under 35 U.S.C. § 101.1

And yet, whether or not the court recognizes this and throws out the case, this lawsuit still might be effective in basically stifling a competitor's ability to even exist in the market. As James Madison once warned: "the monopoly itself, in its original operation, may produce more evil than good."

Filed Under: antitrust, arc, ftc, monopoly power, patents, tv tracking
Companies: arbitron, erinmedia, gracenote, nielsen, samba tv, sorenson

CBS Eyes Ditching Nielsen As Streaming, Cord Cutting Change The Game

from the adapt-or-perish dept

For years, we've noted how popular TV ratings firm Nielsen has turned a bit of a blind eye to cord cutting and the Internet video revolution, on one hand declaring that the idea of cord cutting was "pure fiction," while on the other hand admitting it wasn't actually bothering to track TV viewing on mobile devices. It's not surprising; Nielsen's bread and butter is paid for by traditional cable executives, and really, who wants to take the time to pull all those collective heads of out of the sand to inform them that their precious pay TV cash cow is dying?

Eventually, the cord cutting trend became too big to ignore, forcing Nielsen to change its tune and start acknowledging the very real trend (though they called it "zero TV households" instead of cordcutters). Broadcasters (especially those hardest hit by cord cutting) didn't much like that, and began bullying the stat firm when it showed data that didn't jive with the view a foot below ground. While Nielsen slowly improved its methodologies, it would occassionally back off on certain data collection and reporting changes if the cable and broadcast industry complained loudly enough.

Ironically, this fealty to wishful thinking may not pay dividends for Nielsen. Nearly every broadcasters in your cable lineup is expected to launch their own streaming service by 2022. Many of these companies (like CBS) are now considering ditching Nielsen because, they claim, it's charging too much money for a user tracking system that hasn't adapted for the streaming era:

"At issue is a long-running complaint from TV networks that Nielsen isn’t measuring the many different audiences for their programming as well as it should. As smartphones, mobile tablets and broadband-connected TV’s gain more consumer acceptance, audiences are increasingly able to stream their TV favorites in on-demand fashion, making the task of counting them exponentially more difficult. TV networks have long based their advertising rates on Nielsen’s measure of linear TV audiences, which have slipped as consumers embraced Netflix, Hulu, Amazon Prime and other streaming and on-demand options.

In this environment, TV networks believe Nielsen’s overnight ratings are no longer as reliable a barometer of viewership as they once were.

Go figure. It's ironic that Nielsen often went out of its way to show cable and broadcast executives a narrative they desperately wanted to believe, only to find itself (potentially) booted by broadcasters who no longer see Nielsen's measurement systems as an accurate barometer of customer viewing habits in the cord cutting era.

Filed Under: cord cutting, nielsen ratings, streaming, tv, tv ratings
Companies: cbs, nielsen

Comcast/NBC Caught Intentionally Misspelling Show Names To Help Hide Sagging Nielsen Ratings

from the obvious-integrity dept

The cable and broadcast industry goes to some amusing lengths to downplay cord cutting and streaming competition's impact on ratings and subscriber totals. Initially the impulse was just to insist that cord cutting wasn't real. When the data made outright denial impossible, the industry began insisting cord cutting was only something done by irrelevant nobodies living in mom's basement or Millennials who would see the error of their ways once they procreated. Of course data repeatedly showed that these people were the norm, and now we're looking at potentially one of the biggest quarterly subscriber losses in television history.

As ratings have reflected the industry's dying cash cow, they've also taken consistent aim at viewership measurement systems as well. A bone of particular contention has been Nielsen, which is stuck between trying to accurately measure the damage and cater to myopic cable and broadcast clients that can't hear well with their heads buried firmly in the sand. A few years ago, Nielsen was forced to stop publicizing the rise in broadband-only (not TV) households. More recently, ESPN tried to publicly shame Nielsen when the company accurately highlighted the massive subscriber exodus happening at the channel.

But the cable and broadcast industry has been engaged in some other notable shenanigans to try and protect the illusion that everything is going swimmingly. The Wall Street Journal indicates that the industry has increasingly been going so far as to intentionally misspell their programs in program listings. Why? Because when they know a show is going to see a ratings dip, listing it under another name prevents its core listing from being impacted in the Nielsen ratings:

"That explains the appearance of "NBC Nitely News," which apparently aired on the Friday of Memorial Day weekend this year, when a lot of people were away from their TVs. The retitling of “NBC Nightly News” fooled Nielsen’s automated system, which listed “Nitely” as a separate show. Hiding the May 26 program from Nielsen dramatically improved the show’s average viewership that week," the report adds. "Instead of falling further behind first-place rival 'ABC World News Tonight,' NBC news narrowed the gap."

The Journal goes on to note how this has been a sort of "open secret" in the industry for several years, but as cord cutting has begun to accelerate, its use has increased. At one point, NBC intentionally misspelled "NBC Nitely News" every night for a week. And all of this appears to be happening with the blessing of Nielsen, which again tries to walk a tightrope between being taken seriously as a rating metric system and keeping paying cable and broadcast clients happy with manufactured tales from fantasy land.

For its part, NBC issued a statement that features a number of words, but at no point addresses the issue at hand:

"As is standard industry practice, our broadcast is retitled when there are pre-emptions and inconsistencies or irregularities in the schedule, which can include holiday weekends and special sporting events,” a show spokesman said."

Granted that sounds so much nicer than "we intentionally misspell our own programs to try and pretend our industry isn't facing a massive revolution we're ill-prepared for."

Filed Under: news, nitely news, ratings
Companies: comcast, nbc, nielsen

Despite ESPN Whining, Nielsen Confirms Historic Subscriber Losses For Channel

from the not-just-a-river-in-Egypt dept

Last week, we noted how Disney and ESPN threw a bit of a hissy fit when Nielsen data indicated that ESPN had one of the biggest subscriber losses in company history last month. According to Nielsen's data, ESPN lost 621,000 homes in a single month, as well as losing 607,000 ESPN2 households and 674,000 ESPNU homes. That's of course on the heels of losing more than 7 million subscribers over the last three years or so, thanks largely due to the rise of cord cutting, cord trimming (scaling down your TV package) and the rise of some "skinny bundles" that exclude ESPN from the base channel lineup.

ESPN demanded that Nielsen withdraw its numbers, insisting they represented a "dramatic, unexplainable variation" that didn't match ESPN's own numbers. Nielsen obliged, but after conducting an "extensive" review of the numbers found them to be "accurate as originally released." Of course, this shouldn't be a surprise; we've noted how everybody but ESPN appears to have seen the writing on the wall. But instead of adapting to the changing times, ESPN responded by denying that cord cutting was real, and suing companies like Verizon for trying to bring some flexibility to the traditional cable bundle.

Not too surprisingly, ESPN's response in light of Nielsen confirming its numbers was to continue denying the very obvious fact that customers are tired of paying an arm and a leg for sports programming many of them simply don't watch. From an ESPN statement given to the media:

"This most recent snapshot from Nielsen is a historic anomaly for the industry and inconsistent with much more moderated trends observed by other respected third party analysts. It also does not measure DMVPDs and other new distributors and we hope to work with Nielsen to capture this growing market in future reports."

Except it's not an "anomaly" at all if you've been watching ESPN's subscriber base drop 2-4% per year right alongside dips in other broadcast ratings. Even sports, long believed to be the untouchable holy grail of television programming, has been suffering a notable decline as younger viewers look for cheaper, more flexible alternatives to the bloated cable bundle. ESPN's response to these challenges? Either outright denial or incorrect claims by company executive John Skinner that these departing customers are old, poor, and not worth keeping anyway.

ESPN is the biggest beneficiary of the old method of bloated, overpriced channel bundles, but like so many broadcast and cable companies, it's too terrified of prematurely harming the existing cable TV cash cow to try anything truly innovative. As a result, the company is seeing historic losses in subscribers, with apparently everybody but ESPN seeing that this adaptation (like a standalone streaming service) will need to come sooner rather than later.

Filed Under: cord cutting, espn, ratings, subscribers
Companies: disney, espn, nielsen

Nielsen Forced To Pull Report Offline After It Shows ESPN Losing More Subscribers Than Ever

from the head-firmly-in-the-sand dept

ESPN has been losing hand over fist as consumers shift to streaming alternatives and new "skinny" TV bundles of smaller channels. The company is estimated to have lost roughly 7 million subscribers in just a few years, and a recent survey found that 56% of consumers would drop ESPN in a heartbeat if it meant saving $8 a month on their cable bill (the estimate of how much ESPN costs each subscriber). The losses are largely thanks to ESPN executives failing to see the cord-cutting threat coming. Apparently it's difficult to identify shifting viewership trends with your head buried squarely in the sand.

Fast forward to this week, when viewer-monitoring firm Nielsen released a report stating that ESPN lost more subscribers than ever last quarter. According to the original Nielsen report, ESPN lost 621,000 homes in a single month, as well as losing 607,000 ESPN2 households, and 674,000 ESPNU homes. Interestingly, ESPN was quick to complain that these numbers were in error:

"The Nielsen numbers represent a dramatic, unexplainable variation over prior months’ reporting, affecting all cable networks. We have raised this issue with Nielsen in light of their demonstrated failures over the years to accurately provide subscriber data. The data does not track our internal analysis nor does it take into account new DMVPD entrants into the market."

As a result, Nielsen was forced to issue a statement saying it was pulling the findings for review:

"Nielsen is investigating a larger than usual change in the November 2016 Cable Network Coverage Universe Estimates (versus the prior month). We take the accuracy of our data very seriously and are conducting a thorough analysis to determine whether or not there is an issue with these estimates. In the meantime, we have removed the November 2016 Cable Network Coverage Universe Estimates file from the Answers portal and ask clients not to use the numbers that were posted Friday. We are working closely with clients and will alert them on the findings of our internal review."

While it's entirely possible Nielsen did make a mistake, this isn't the first time the company has been willing to withhold data simply because the cable and broadcast industry didn't like what the data indicated. In 2014, Nielsen backed away from including broadband-only household data in the firm's local TV ratings service because broadcasters didn't like what that data said. The company spent many years denying that cord cutting was real, then simply changed the name of cordcutting to "zero TV households" when it was forced to actually ackowledge the trend was real.

Again, Nielsen may have flubbed the data and the estimates could be a little too high (given past trends likely not by much), but it's also entirely possible this is just part of an ongoing attempt by the cable and broadcast industry to shield itself from the reality of evolving markets.

Filed Under: cord cutting, monitoring, subscribers, tv
Companies: espn, nielsen

ESPN Gets Nielsen To Revise Its Data To Suggest Cord Cutting's No Big Deal

from the massaging-statistics dept

We've discussed for years that as an apparatus directly tied to the wallet of the cable and broadcast industry, TV viewing tracking company Nielsen has gladly helped reinforce the cable industry belief that cord cutting was "pure fiction." Once the trend became too obvious to ignore, Nielsen tried to bury cord cutting -- by simply calling it something else in reports. And while Nielsen was busy denying an obvious trend, it was simultaneously failing to track TV viewing on emerging platforms, something the company still hasn't fully incorporated.

We've also been talking about how ESPN has been making the rounds, trying to "change the narrative" surrounding cord cutting to suggest that worries about ESPN's long-term viability in the face of TV evolution have been overblown. Part of that effort this week apparently involved reaching out to Nielsen to demand the company fiddle with its cord cutting numbers, which ESPN then peddled to reporters in the hopes of creating an artificial, rosier tomorrow:

"On Thursday, ESPN reached out to reporters to let them know that cord-cutting isn’t nearly as bad as it sounds, and that the reason is the way Nielsen revised its pay-TV universe estimates. Nielsen (under client pressure) decided to remove broadband-only homes from its sample, but it didn’t restate historical data. It is now showing that, as of December, 1.2 million homes had cut the cord, a much smaller number than its earlier figure of 4.33 million homes for the year."

Isn't that handy! This of course isn't the first time Nielsen has tweaked troubling numbers on demand to appease an industry eager to believe its cash cow will live forever. The irony is that the same industry that's happy to gobble up potentially distorted data is simultaneously deriding Nielsen out of the other corner of its mouth as a company whose data is no longer reliable in the modern streaming video age. In a profile piece examining Nielsen's struggle to adapt, the New York Times (and Nielsen itself) puts the problem rather succinctly:

"Yet Nielsen is established on an inherent conflict that can impede the adoption of new measurement methods. Nielsen is paid hundreds of millions of dollars a year by the television industry that it measures. And that industry, which uses Nielsen’s ratings to sell ads, is known to oppose changes that do not favor it. “People want us to innovate as long as the innovation is to their advantage,” Mr. Hasker said.

Obviously getting a distrusted metric company to fiddle with data even further won't save ESPN. The company's SEC filings still suggest ESPN lost 7 million subscribers in the last few years alone. Some of these subscribers have cut the cord, but others have simply "trimmed" the cord -- signing up for skinny bundles that have started to boot ESPN out of the core TV lineup. Similarly, studies have recently shown that 56% of ESPN users would drop ESPN for an $8 reduction on their cable bill. This sentiment isn't going to magically go away as alternative viewing options increase.

BTIG analyst Rich Greenfield, who funded that survey and has been a thorn in ESPN's side for weeks (for you know, highlighting facts and stuff), had a little advice for ESPN if it's worried about accurate data:

"“If this is an important issue for ESPN, they should start releasing actual subscriber numbers rather than relying on third parties [Nielsen]. If they are upset with the confusion, let’s see the actual number of paying subscribers in the US over five years."

Wall Street's realization that ESPN may not fare well under the new pay TV paradigm at one point caused $22 billion in Disney stock value to simply evaporate. As a result, ESPN executives have addressed these worries in the only way they know how: by massaging statistics and insulting departing subscribers by claiming they were old and unwanted anyway. One gets the sneaking suspicion that's not going to be enough to shelter ESPN from the coming storm.

Filed Under: cord cutting, data, denial, measurement, metrics
Companies: espn, nielsen

Now That Nielsen Can Actually Be Bothered To Track Internet Video, The Numbers For Traditional TV Are Getting Ugly

from the viva-la-revolucion dept

For years, we've noted how popular TV ratings firm Nielsen has turned a bit of a blind eye to cord cutting and the Internet video revolution, on one hand declaring that the idea of cord cutting was "pure fiction," while on the other hand admitting it wasn't actually bothering to track TV viewing on mobile devices. It's not surprising; Nielsen's bread and butter is paid for by traditional cable executives, and really -- who wants to take the time to pull all those collective heads of out of the sand to inform them that their precious pay TV cash cow is dying?

Now that Nielsen has decided to join us in 2015 and start tracking streaming service and mobile device viewing, the numbers, shockingly, aren't looking all that hot. Nielsen's latest analysis shows a number of things, most notably a decline in pay TV subscribers but a sharp uptick in users who are only subscribing to broadband:

"According to Nielsen’s second-quarter Total Audience report, the number of homes with pay-TV subscriptions—a crucial number for the industry—is down 1.2% to 100.4 million from 101.6 million a year ago. The number of broadband only homes rose 52% to 3.3 million from 2.2 million...Meanwhile, the share of homes with subscription video on demand rose 18% to 45% in the second quarter of 2015 from 38% in the second quarter a year ago. The number of homes with enabled smart TVs rose to 18% from 11%."

So, yeah. Traditional TV is slowly and surely dying. While Nielsen helped prop up the industry belief that cord cutting was over-hyped, other tracking firms were busy pointing out that not only were cable TV providers slowly hemorrhaging subscribers each quarter, but the number of new pay TV subscriptions weren't scaling in line with new home ownership growth like they used to.

And that's before you even get to traditional broadcast numbers. Data had already shown a sharp downtick in viewership for traditional cable channels, starting with children's programming and now even impacting the supposedly untouchable ESPN. Nielsen's latest traditional ratings data also shows that TV viewership ratings continue to drop, with fall's TV premiere season landing with a thud for every major show without Kermit the frog in it:

"According to Nielsen fast national data, every returning Tuesday night drama suffered double-digit ratings declines, while the three new series were a mixed bag. Leading off the night at 8 p.m., ABC's reboot of "The Muppets" put up decent numbers, averaging 8.91 million viewers and a 2.8 among adults 18-to-49, making it the night's No. 2 rated show behind "The Voice."..Networks have always banked on Premiere Week as an interval of peak sampling, but Tuesday night's PUT (or people using television) levels were discouraging. The number of adults 18-to-49 watching primep-time programming dropped 8% versus the year-ago period and overall usage in the demograhic for the last two nights is down 10%.

Gosh, it's almost like viewers are headed to a fictional land where they have more control over what they view for much less money? It gets worse: TV viewing among adults 18-to-24 dropped 20% from last year, and male usage in that holy-grail demographic has wilted by roughly 24%. Again, cable and broadcast executives (and if you're Comcast NBC Universal, that's one and the same) could stop all of this right now if they were willing to offer more flexible channel lineups and compete on price, but they've grown too fat and comfortable to notice the storm clouds gathering on the horizon.

Filed Under: internet, tv, video
Companies: nielsen

Years Of Pretending Netflix Cord Cutting Wasn't Real Is Biting The Cable Industry In The Ass

from the monsters-don't-go-away-when-you-ignore-them dept

If you didn't know, Netflix is kind of huge. So huge, in fact, that some new analysis suggests that if Netflix was a Nielsen-rated TV network, the service would, sometime within a year, attain a larger 24-hour audience than ABC, CBS, NBC or Fox. That's something Nielsen itself should probably be tracking, but as we've noted previously, Nielsen has painfully lagged on actually tracking the cord cutting revolution, for fear of upsetting cable and broadcast executives with their heads planted squarely in the sand.

The analysts at FBR Capital Markets note that Netflix served 10 billion hours of internet video content in the first quarter of the year, roughly two hours per subscriber per day. By dividing this two-hour figure by 24 hours, then multiplying it by the number of U.S. Netflix subscribers as a percentage of households, the analysts estimate Netflix would see a Q1 ratings score of 2.6, on par with both ABC and NBC. The difference, of course, is that Netflix is growing quickly while traditional cable broadcasters are losing market share, especially on the kids programming front.

Of course, the fact that Nielsen can't join the modern era and track TV viewing over the internet suggests this isn't quite yet an apples-to-apples comparison:

"One major caveat: Nielsen TV ratings cover, at most, up to seven days of VOD and DVR viewing — and exclude online-video views, which networks say are an increasing part of the pie. Moreover, TV networks provide a different blend of content, such as live sports, that Netflix doesn’t. And anyway, Netflix doesn’t care about “ratings” of individual shows, given that it doesn’t sell ads and has steadfastly refused to disclose anything but general data about viewing."

Except Variety may overstate this, since the cable industry's "TV Everywhere" initiative (which lets users watch cable content on their iPads and other devices in the hopes of keeping them from cutting the cord) is a bit of a dud. Cable video on demand viewing has been in the toilet for some time as well. And while sports is where cable still outshines internet video (for now), the cable and broadcast apparatus isn't helping its case by failing to improve customer service, yet relentlessly driving up rates in the face of this increased competition. As such, people generally like Netflix's value proposition more:

"Another data point called out by FBR’s analysts: When consumers were asked if they had to choose between Netflix and a cable or satellite TV subscription, 57% picked Netflix, with 43% opting for pay TV, according to a survey FBR conducted with ClearVoice Research in April. "Netflix subscribers clearly like it more than pay TV, which we see as arguing for pricing leverage, since pay TV, on average, costs over $80 per month,” the analysts wrote, citing Netflix’s average $8 price point."

And things are going to get worse. Netflix is already leading the charge toward 4K and HDR content, something the cable industry (and especially the telcos using fiber to the node or DSL) won't have the bandwidth to deliver for years. And while the cable industry loses subscribers slowly to cord cutting, Netflix is busy growing internationally, with plans to offer service in 200 different countries by the end of this year. Apparently, burying your head in the sand and pretending cord cutting wasn't real didn't magically stop the future from arriving anyway. Who knew?

Filed Under: cord cutting, internet, internet video, measurement, video on demand
Companies: netflix, nielsen

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?

Filed Under: analytics, cord cutting, measurement, metrics, online streaming, online video
Companies: amazon, netflix, nielsen