Nielsen this week launched a syndicated SVoD measurement service, and revealed that it has already signed up eight major TV networks and studios for the service, including A&E Networks, Disney-ABC, Lionsgate, NBCUniversal, Warner Brothers.
In essence any SVoD service knows full well how many customers it has and how much use they make of the service and don’t need help measuring it – but right now, in their start-up phase, most of them are not keen to reveal those numbers and even Netflix does not give out viewing details to the media.
But while these young businesses may have a vested interest not to say how little of the SVoD market they have won over, and Netflix is keen not to let rivals see too deeply into the rules of thumb that guide its investment into original content, a service which comes from the “old guard” for the old TV guard, is likely to understate the impact of SVoD and this has all the credentials of a good old Nielsen cover up.
SVoDs which do not offer advertising, have nothing to gain from revealing their detailed numbers, and everything to lose if one of their original projects either misfires, or starts badly and everyone hears about it. Financial analysts are often drawing conclusions about the “viability” of the Netflix spend on original content, and giving out is numbers would throw more wood on that particular fire, undermining its share value.
But Nielsen has its tried, and not-so-trusted, Nielsen National TV Panel which can work out which SVoD program you are watching. Now is this because it has data deals with Roku, Apple TV, Amazon Fire and Google Chromecast? Or is this “listening” to the music on a particular device and using that to identify what you “must” be watching from the audio track version? Or is this the passive People meters that people still enter data into? Likely all three.
Nielsen said that it began measuring streaming content in 2014 via an opt-in service. Opt-in, is a self-defeating process as the consumption rates of people who would rather not tell you what they are watching will always be very different from those who are keen to tell you. Whatever way it measures within a sample, Nielsen then has to scale this up for the rest of the country, and it will always be working with historical, end of prior year data on how many say Roku devices are installed. It institutionally under-estimates online viewing. It’s built in.
If the customers that you are selling it to have a vested interest to “under-report” then that’s alright then.
But of course some of those companies don’t only want to hear that their linear broadcast services are holding up better than expected, they also want to hear that their skinny bundles, which may or may not include advertising, are doing better than everyone else’s.
Another thing that should come out of this is the DVR content that is viewed outside of the 3 day window that means it is included in some way among live advertising impressions. When consumers view a 4 day old DVR program does this means that advertisers can now be charged for these impressions, despite the fact that we all know that no-one watches TV ads on a DVR?
What really worries us about this is how Nielsen will record multiple viewing which happens simultaneously. We know from watching generation Z watch the TV, that the most engagement is with the portable device – and the secondary engagement is with the larger TV. The “private” experience comes first, and the “shared” experience comes second. So a room with one adult and two Generation Z members, might have a tablet, a smartphone and a TV present, with the portable devices both being viewed with the sound coming through an earpiece. How will Nielsen count that? As three people watching the TV, most likely. Netflix seems to think that Nielsen doesn’t even have the ability to count the portable device viewing.
Megan Clarken, President of Watch, Nielsen, said “The syndication of SVoD measurement as part of Nielsen’s Total Audience offerings represents a big step forward in terms of moving closer to transparency within the SVoD marketplace,” suggesting that clients will have a more comprehensive view of their content’s total audience regardless of where it was viewed.
But Nielsen quite rightly has sensed that these major studios need to compare their programming with the Netflix programs in some major way, and this is potentially the only game in town.
Nielsen has been collecting Netflix data on a trial basis using audio recognition software in 44,000 US homes. This can only be from the people meter in the home or the portable people meters carried by a person, so viewing in any room but the one with the TV in will be institutionally under-reported, more likely completely ignored.
Netflix will almost certainly be really upset about the reporting and perhaps could legally request it to desist. Its viewing figures are nobody’s business but its own if it is not using them to sell advertising.
The linear TV industry in the US continues to be unable to see how dramatically Netflix has changed TV – from an experience that is free and you have to put up with tons of adverts – to one where you pay for what you’d like to see. Almost all US skinny bundles re-introduce advertising in some way, and even Hulu continues to have adverts, which simply means these services are rooted in the past.
Once everyone realizes how few people a Netflix original needs to pull in, for the company to make money they are going to be perplexed. Netflix originals are additive. In other words if 200,000 watch one of the most popular originals every night, and 100,000 different viewers watch two further originals, that’s 400,000 people who had to buy Netflix. Advertising is the opposite, where the adverts, before the advent of programmatic advertising, is attached to one program, not one service, so the measurement of VoD viewing is not comparable to AVoD viewing.
And if Nielsen manages to throw a light on the patterns of behavior behind binge-watching, companies like Netflix will feel like their internal business models have been taken out and exposed to their rivals. Binge viewing is a science as much as click-bait is on the internet and Netflix has the formula down. Giving it out to everyone else will be the equivalent of revealing confidential information. If you throw a demographic into the mix, all those skinny bundles can learn who to target as well off the back of Netflix experience.