comScore undercuts Nielsen, gets handed panic lawsuit

Faced with the daunting task of renewing a pile of major contracts, amid increasing threat from cross-platform competitors, audience measurement giant Nielsen has lashed out by filing a lawsuit seeking to block the launch of comScore’s new Extended TV service. It isn’t the first time the two rival companies have clashed, but in this instance, Nielsen has revealed some major cracks in its historically solid standing in US TV viewing data.

Nielsen alleges that the audience data provided by Extended TV is based on its own Portable People Meter (PPM) data, claiming that it violates an agreement between the two. This is despite a ruling by the FTC (Federal Trade Commission) back in 2013, in which Nielsen had to license PPM data to comScore for the sake of maintaining a competitive market, as a condition of Nielsen swallowing Arbitron (now Nielsen Audio).

The apparent breach in agreement lies in Nielsen’s belief that Extended TV is a measurement product purely for linear TV. The contract states that Nielsen’s PPM data cannot be used by comScore to measure a standalone linear TV service, while comScore has reiterated that Extended TV is in fact a cross-platform measurement tool – leaving the argument at stalemate. Interesting that the FTC mandated this, so we wonder if the FTC mandate insisted on the precise use of the data. If not Nielsen is grasping at straws.

Four years on, comScore is a much more real threat to Nielsen following its ambitious takeover of Rentrak for $732 million last year. Nielsen, with its tail between its legs and army of lawyers on board, might just win some ground in the case by convincing the FTC to reverse its original data-sharing deal. However, the agreement for comScore to tap into Arbitron data is not due to expire until 2021 and anyway that would create a dysfunctional market. By 2021 so few people will be watching on broadcast media in the US, that people meters will be useless, as interactive real time measurements will have taken over.

The real reason Nielsen is riled up is that Extended TV intends to undercut Nielsen’s own audience measurement service, and a Nielsen representative claims that one TV network has already switched out a Nielsen system in favor of Extended TV following a beta trial.

Nielsen told Deadline Hollywood, “comScore’s use of Nielsen PPM data in its planned Extended TV service violates the parties’ agreement by offering linear television measurement without online viewership while claiming Extended TV is a cross-platform service. This requires Nielsen to ask the courts to stop the introduction of Extended TV until this matter can be resolved through arbitration.”
Surely the FTC should arbitrate.

comScore now offers census-based data measurement, which is considered superior in measuring viewership compared to Nielsen’s older, panel-based approach. So the fact that comScore still provides data based on Nielsen’s PPM, shows that these devices maintain a significant importance in the market today. Its PPMs cover around 65% of the US, with its out of home panel comprising 77,000 people in 44 local TV markets.

Filed with the US District Court in Manhattan, Nielsen said in a statement that the launch of Extended TV would cause “irreparable harm to its business through loss of important customers and decreased market share.” Surely that was the point of the FTC compromise, that this market needed competition, which means price reduction.

In an attempt to gain a few yards from the competition, Nielsen launched its new out of home TV viewership service earlier this year, signing up ESPN and Turner, and also acquired Gracenote at the end of 2016. comScore’s biggest win of late was its integration at Charter for aggregated and anonymized TV audience data – allowing comScore’s TV measurement services to cover 35 million homes and 75 million TV sets. So when the deal finally ends in 2021, it looks like comScore will be ready to live without this data.

In response, comScore said it “intends to vigorously contest Nielsen’s actions, as comScore believes it is acting properly under the FTC’s order. comScore also believes that its contracts with Nielsen require the matter to be resolved exclusively through arbitration, and not in the courts.”

Another competitor in the market is Kantar, the research arm of advertising monolith WPP, which comScore has rallied with to chip away at Nielsen. A major move Kantar made recently was a deal with SambaTV to merge data from 13.5 million US smart TVs with its PC and mobile audience measurement system. Slowly people meters are being obsoleted.

Samba claims that it analyzes 7,000 years of TV viewership a day across millions of households worldwide, which gives brands a holistic view of content and advertising consumption across broadcast, cable, OTT, apps and other digital platforms. Samba TV offers a real-time, opt-in TV viewership insights and connected device map, which Samba says includes 66 million devices for 1:1 mapping and to increase programmatic reach.

Nielsen still has a long way to go for unifying viewing metrics across platforms, devices, and consumption modes.

“Given that comScore plans to launch Extended TV in the next few months, with the intention of having the product available at the end of 2017, it is possible that Nielsen will lose other clients, particularly given that Nielsen has several large client contracts up for renewal,” said a Nielsen statement. About time.