Based on a number of conversations I've had with cable programming executives, Nielsen's current inability to measure online viewing of TV programs and meld that data effectively with on-air viewing is emerging as a key stumbling block to successful rollouts of TV Everywhere services.
Cable networks are justifiably concerned that any viewership that potentially shifts from on-air to online that they are not credited for will adversely impact their ratings and therefore their advertising revenue. Until the issue is fixed cable networks will be reluctant to offer their most popular programs to TV Everywhere providers, in turn diluting TV Everywhere's appeal to consumers.
Nielsen, the de facto standard in TV ratings measurement, is well aware of these concerns and as Multichannel News reported this past Monday, it plans to accelerate the deployment of its "TVandPC" software which measures online viewing to 7,500 of its National People Meter households by Aug. 31, 2010. While that's a start, as industry executives have told me, it's not just the online viewing data that's needed, but also the proper blending of that data with the on-air data that's critical.
Among the issues is how online viewing, which offers consumers the potential of much-delayed on-demand viewing, should be aligned with Nielsen's "C3" ratings, which captures up to 3 days playback on DVRs. Another issue is understanding and measuring new TV Everywhere viewership patterns (e.g. college students remotely watching shows on a laptop which has been authenticated by Mom and Dad's cable account). Then there's the question of whether the online ad loads are going to be comparable to those on-air (e.g. if the online share of a program's overall viewership carried far fewer ads than the on-air viewership, advertisers and media planners will want to know this). No doubt other issues loom as well.
Add it all up and the process of collecting and then blending online and on-air viewership data is non-trivial and will require a significant investment and testing on Nielsen's part to accomplish. From Nielsen's standpoint, it could be reluctant to make such an investment in overhauling its measurement service unless there were pre-commitments from some of its clients to accepting and buying the enhanced ratings service.
On the one hand, it would seem that cable networks' reluctance to embrace TV Everywhere until adequate measurement systems were in place would be a strong incentive for TV Everywhere providers to support Nielsen's enhancements. However, I've been told that when Nielsen previously made improvements to track Video-on-Demand viewership, not many service providers implemented necessary mechanisms to denote programs were VOD-based, and therefore Nielsen's investment yielded little return. Particularly given the tough economic times, that could make Nielsen more cautious about how it proceeds with online ratings. For now Nielsen has not disclosed its plans.
Still, Nielsen is under pressure to move forward given the formation of the Coalition for Innovative Media Measurement (CIMM), which is comprised of 14 TV networks, agencies and advertisers. CIMM's goal is to explore new methodologies for audience measurement, particularly for set-top box data and cross-platform media consumption. While some in the industry have tagged CIMM as a Nielsen challenger, its members have said they have no intention of trying to replace Nielsen. Regardless, the presence of an industry-backed group trying to wrap its arms around cross-platform audience measurement is likely to only accelerate Nielsen's online tracking efforts.
As VideoNuze readers know, I've been quite enthusiastic about TV Everywhere's potential, though I'm plenty cognizant of the challenges it faces. Measurement is surely near the top of that list. One of the benefits to Comcast of owning NBCU is that, if it chooses to, it can release NBCU's cable networks' programs for TV Everywhere viewing, absent complete online tracking. This would be comparable to what Hulu's owners have chosen to do by distributing their broadcast network shows online (they're at least partly motivated by the belief that online viewing augments on-air viewing). But Comcast won't take ownership of NBCU for another year or so. By that time Nielsen may well be close to rolling a blended online/on-air offering.
In sum, it could well be that 2010 ends up being more a year of experimentation for TV Everywhere while building blocks like audience measurement get put in place. VOD, which years since its launch still lacks many primetime programs as well as dynamic advertising insertion, offers a cautionary example for TV Everywhere providers of how a lack of investment can block the realization of a new medium's full potential. Cable networks in particular will keep looking for signals that TV Everywhere will be more robust than VOD before they get too enthusiastic about online distribution.
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