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