Those of us who were involved in the initial industry meetings that led to C3 as a compromise between buyers who wanted Live only and sellers who wanted C7, remember that Nielsen did very little research into the methodology it decided to use in calculating this new metric.
Part of the reason was that the upfront was approaching. The industry needed to deal with the growing impact of time-shifted viewing, and C3 was designed as a one-year transition (two at most) until the industry post-buy systems, Donovan and Datatech (since merged to form Media Ocean), were able to report and post on exact minute ratings.
I wrote about how C3 did not take fast-forwarding through commercials into account, which, at the time, Nielsen acknowledged. Most people in the industry should have been fully aware. But again, since C3 was planned as a temporary move, and DVR penetration was barely 20% of TV homes, it wasn’t a major priority to fix this.
I remember saying at the time that once C3 was implemented, it would become the standard metric, and it would be difficult to move to something else, since neither agencies or networks really wanted to deal with the nightmare workload involved in actually switching to minute-by-minute ratings on a massive scale – particularly after dealing with the one-year nightmare involved in just switching to C3 (anyone who worked in an agency TV research department back then knows what I mean).
I’ve been part of a few industry meetings since, then where the topic of individual commercial or commercial pod ratings (my choice) were discussed. But there never seems to be any actionable follow-up.
Those of us who remember when cable was posted based on quarter-hour program ratings should realize that this data was actually closer to commercial ratings than are C3 ratings. That's simply as a result of the way programs build or lose audiences over the course of a telecast.
C3, which merely weight-averages minutes that contain commercials based on how many seconds of commercial time are contained in each minute, is not necessarily close to any individual commercial rating.
Over the past few years, for some reason, a lot of people started to think that C3 accounts for fast-forwarding through commercials. It doesn’t. This has to do with the way Nielsen measures the average minute. Basically, it looks for the plurality (not the majority) of time viewed to determine whether a channel is counted as being viewed for that minute. In other words, if during a given program minute, you are tuned to ABC for 20 seconds, and four other networks for 10 seconds each, you are counted by Nielsen as watching ABC for the full minute.
When you are playing back something on DVR, however, there is only one channel. So any tuning to that channel, even just a few seconds, is a plurality, and will count as viewing the entire minute. This will typically only impact the first and last minute of a commercial pod, but it obviously leads to C3 counting a significant amount of fast-forwarding as commercial viewing.Switching to C7 would not change much in terms of how far away we are from actual commercial measurement, and since it gives a better indication of overall program viewing, there’s no reason not to go with C7. Any research analysis of time-shifted viewing should be done on a full-week basis anyway.
The difference between C3 and C7 ratings for most cable networks is insignificant. It is greater for the broadcast networks, which have a lot more original scripted series, and therefore much more time-shifted viewing.