Top executives at large media companies routinely indicate to investors that a big chunk of their programming is taking place off the traditional TV set and not counted by Nielsen. The implication being: buy shares now because once that’s measured and advertisers pay fairly for it, watch out.
Fair enough. Network research departments surely have some sense of the numbers and their sales colleagues have a feel for the monetization potential. But, the suggestion that Nielsen has lots of work to do before a network can get what it deserves rings a little hollow.
Nielsen has the capability now to produce multi-platform ratings that if a cash waterfall awaits a CBS or Viacom, the companies can seek it. Nielsen is capturing the traditional video-on-demand (VOD) and online viewing executives cite.
The national TV market uses a C3 currency, which captures average commercial ratings for a live broadcast and the ensuing three days (covering DVR-enabled viewing). Networks want to move to a C7 metric to charge for an additional four days.
Media giants will say the extension is only fair since so much delayed viewing is happening further after broadcast. They also cite that viewership growing via VOD and online platforms.
So, seems like their ideal solution would be a single C7 rating that combines viewing over a seven-day period on every platform – a C7 360.
By combining its traditional TV panel and an “extended screen” product, Nielsen can provide that (for the most part) now. But AMC and Turner are the only ones taking advantage, though others are considering it.
“There are solutions that are not being fully utilized,” said Brian Fuhrer, a Nielsen senior vice president.
But Fuhrer conceded there are valid reasons for the low penetration and clients have been “very collaborative” since “it requires them to, in effect, be part of the solution.”
The aggregate C7 rating Nielsen can produce now takes into account viewing on TV, VOD and online (via both PCs and Macs). But there is some mileage to travel.
Nielsen does not capture viewing on tablets or smartphones (that might come in 2014) – so networks would have a legitimate complaint about an incomplete picture. It’s unclear how much viewing is taking place on tablets and smartphones.
(Side note: Nielsen measures consumption on Netflix, meaning a programmer could gain insight into how many subscribers are watching specific shows. Netflix is not ad-supported, so it’s in a different ballpark. But the information is valuable for networks as they negotiate with Netflix.)
So, media companies complain, but really the onus may be on them. Here’s a rub: in order to put together that single C7 360 number, networks need to run the exact same commercials in the same order on every platform.
The ads need to be coded such that Nielsen can pick them up. That’s a challenge, notably with VOD, where networks need to work with cable operators, which can complicate things. And, there are also issues touching on digital rights. There are also business interests.
For a C7 360, networks would need to commit to increasing commercial loads on VOD and online feeds. Yet, perhaps not wanting to risk alienating viewers, networks haven’t shown a willingness to offer the same commercials on all platforms.
As TV Everywhere expands, more networks will make live simulcasts available on digital platforms, so they’ll have to wrestle with commercial volume issues. (Hulu viewing may never be part of C7 ratings since its approach to ads has limitations.)
“They’re trying hard to make the right decision,” says Nielsen’s Fuhrer of networks.
If the market moves toward a C7 360, it may actually behoove networks to encourage as much VOD and online viewing as possible. Commercial skipping would presumably go way down – considering the fast-forward button can be disabled with VOD and ads online are un-skippable.
(Another side note: Nielsen is working so it could splice up an aggregate C7 number, where coding would allow it to provide details on viewing levels by platform -- linear TV, VOD, etc.)
Back to the currency debate. Networks have an uphill battle in getting advertisers to agree on a multi-platform C7 number to serve as a currency. One, advertisers would need to basically agree that the value of reaching a viewer on ABC.com is similar to on the network and via an iPad app. Networks would probably have to be given leeway to offer make-goods on multiple platforms.
Brian Wieser, a former MagnaGlobal executive now at Pivotal Research Group, actually believes advertisers might go for it. He writes that while advertisers “may believe there is something superior about a big-screen TV commercial and would prefer that their TV campaigns be satisfied with traditional TV inventory, we think that when presented with an alternative choice of ‘following the consumer’ with a single standardized metric,” they would be on-board.
And so, Wieser proposes the industry move towards a cross-platform currency, which would use “extended screen” as one driver.
But the bigger challenge for networks is getting advertisers to agree to abandon the current C3 currency. And why would they with the free exposures they’re getting? A sellers’ market would help, but advertisers know those don't last.
Paradoxically, if network ratings keep going down, networks may find their demand rising, which might give them a chance to say “take it or leave it.”
Crafting a “grand compromise” may just be in the hands of GroupM executives led by Chairman Irwin Gotlieb. GroupM, a media buying behemoth, played a key role in the shift to C3 several years back.
On Thursday at a B&C/Multichannel event, Gotlieb didn’t seem in any rush to move to C7. Retailers and movie studios looking to attract customers quickly would be less inclined to pay for viewership outside the current three-day window.
But he did, according to Multichannel News, agree that there will be “more erosion in TV delivery to alternate mechanisms,” notably tablets moving ahead.
He also said that what could emerge would “be more than one currency.” As confusing as that could be, it could be the only solution both sides will accept.