Paramount Drops Nielsen In Pricing Dispute
- by Wayne Friedman , October 1, 2024
Paramount Global has dropped Nielsen, its main viewer measurement currency, due to soaring pricing demands, according to the company. Nielsen is the longtime third-party TV data-measurement company that advertisers have counted on for decades to finalize their media schedules.
Paramount's contract with Nielsen expired Monday, September 30 at midnight.
“Nielsen has severed our long-standing measurement partnership with its unacceptable demands, including substantial price increases that are inconsistent with the realities of a changing industry,” Paramount said in a statement.
“We have spent the last few years preparing for a multi-currency future and creating the operational infrastructure to move beyond Nielsen. We are confident in the quality of our alternative currency offering for clients as we continue efforts to reach a new Nielsen agreement with reasonable economic terms.”
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“We look forward to working with Paramount on a new agreement," according to a Nielsen statement.
According to a memo to clients, John Halley, president of advertising for Paramount Global, says:
"Nielsen’s costs as a percentage of Paramount ad revenue have quintupled over significant parts of our business over the last years; in certain instances, Nielsen's fees already exceed the total advertising revenue of the network being measured. This has led us to conclude that the model, as proposed, is not workable, and that the cost structure requires re-engineering."
Paramount has a current deal with VideoAmp to offer advertisers alternative viewership data. For the last four months it has been ramping up that company’s efforts for its advertiser clients in anticipation of a possible Nielsen stalemate.
Halley: "If we ultimately reach an agreement, we anticipate being able to revert to Nielsen data for planning, measurement and stewardship. If preferred, we can also transition guarantees to VideoAmp permanently."
In 2019, Paramount Global’s CBS Corp. went through a similar dispute tied to pricing.
CBS dropped Nielsen over a similar dispute tied to pricing -- which affected CBS Television Network, CBS Television Distribution, Showtime Networks, Smithsonian, Pop, CBS Sports Network and CBS’ 27 owned-and-operated local television stations.
CBS networks/platforms were without Nielsen measurement for about 11 days.
Paramount Global has been in the process of being acquired by Skydance Media, an on-the-lot major TV and movie producer for Paramount. It is under pressure to cut several hundred million dollars in costs.
The Skydance deal for Paramount is an all-stock transaction valued at $4.75 billion, creating a company with an enterprise value of $28 billion. A Skydance investor group will also invest $2.4 billion in cash to acquire Paramount Global's parent National Amusements.
This story has been updated.
The new owners are obviously pressuring the Paramount people to squeeze Nielsen to save some money---but that's not going to work as any cave in by Nielsen to Paramount on pricing would require the same treatment for Nielsen's other major national TV time sellers---and that's not in the cards. So for those who keep hoping that the major TV time sellers will dump Nielsen --sorry, but don't start celebrating. It's most unlikely that Paramount will not be using Nielsen again---shortly.
Interesting statement from Paramount: "in certain instances, Nielsen's fees already exceed the total advertising revenue of the network being measured." Seems an astute manager would shut this business down, no?
In the early years of a new cable network, when ad sales were just ramping up, we'd ask for and get a "fledgling service discount" which was substantial. Wonder if they still have that these days for networks low low ad sales.
Doesn't sound like this is about fledglings. If a network pulls on less mo way than measurement costs, and it also has all other network costs, doesn't sound worth keeping. In the old days, you bundled these when you raised prices so operators would swallow the cost of an enhanced bundle. Those moves don't work any more.
Sorry typos.
Doesn't sound like this is about fledglings. If a network pulls in less revenue than measurement costs, and it also has all other network costs, doesn't sound worth keeping. In the old days, you bundled these when you raised prices so operators would swallow the cost of an enhanced bundle. Those moves don't work any more.
Are we really that surprised??? Paramount along with NBCUniversal, FOX & Warner Bros. Discovery own OpenAP and consequently the"Multi-Currency Certification Committee" that is masqueradingas a JIC. It is unequivocally neither a JIC nor a MOC and as reported in Media Post smacks of conflicts of interest. Currency for any medium's trading is singular. It avoids the confusions generated by this on-going farrago.
I must say that the attention that this minor dust-up is getting amazes me. If it's true that Nielsen's fee for reporting---not to be confused with measuring as it measures everything subscribing or not---the ratings in some instances exceeds those services' incomes, then, as Jack points out, why are such services still operating?It's not Nielsen's fault that Paramount has a few revenue-weak sisters in its portfolio.
While I wish VideoAmp the best, let's not forget that all of the top media buying agencies subscribe to Nielsen---so they will have the "missing" data they need to evaluate Paramount's audiences anyway. Meanwhile, the latter's sales teams will have to rely on the buyers for Nielsen rating information---putting them in a rather unenviable position.
Touche'. Sadly Paramount Research group is conspicuously absent in this statement of complaint. There are lots of creative ways for nets to structure deals with research suppliers, especially Nielsen because of its very broad range of services. Only the Research group really understands the various products and can work creatively to strike a deal. Also, consider all the time money and effort that has been used to vet, manage and process data from multiple providers. Has it been worth the expense? I don't see how you cut Research staff while upping the number of currency providers you use. This is a losing proposition.
Wow....this is a group of research heavyweights! Ed, Coach, Mr. Cohen. I'm no match for you guys but the network with ad revenue that doesn't equal the Nielsen (I assume total) bill..... If its still running the programming costs must be next to nothing....(lots of repurposing in the family), there's a little operator revenue, management that runs iit probably runs a additional channels and the actual ad time sold is just packaged in at low figures with the other networks in the group. Can anyone say "Country Music Television"? What's country about the schedule that consists of Roseanne, King of Queens, Mom, Golden Girls, Mama's Family (Mama's kind of country I guess). Low revenue, lower costs.....so it stays on the air.
My thought was not that revenue exceeded the total Nielsen bill, but that the amount Nielsen charges for that small network is greater than that nets revenue. Every Nielsen contract I've seen always itemizes a price for each net. I hear what you're saying, though. You can have a cable net with very low programming costs, and ratings and revenue. If ratings for that network cost more than the revenue after programming, you and I would probably tell Nielsen to stop reporting on it and save the money. My reading, again, is that Paramount execs are saying the Nielsen stated price for measuring some of their nets exceeds the revenue of these smaller nets.