The Shifting Landscape of TV Ratings and Measurement
The television industry has long relied on ratings to determine the success of shows, but the way people consume content has changed dramatically. Last month, the Golden Globes drew either 10.1 million or 9.3 million viewers, while “Sunday Night Football” attracted 28.5 million or 25.8 million. The finale of “Yellowstone” was watched by 11 million or 8 million. These discrepancies highlight the growing challenge of accurately measuring viewership in an increasingly fragmented media landscape. Ratings are the lifeblood of the TV business, influencing how much advertisers pay for commercials. Each year, advertisers spend $60 billion on television, but the accuracy of these ratings is increasingly questionable.
The faith in TV ratings is fraying because people now watch content in so many different ways—on an antenna, cable, streaming apps, or websites, and at different times, whether live, recorded, or on-demand. This complexity has made it difficult for the industry to agree on a consistent way to measure viewership. Media executives and advertisers are often uncertain about the true popularity of a show, whether it’s a hit or a flop. The scramble to find a reliable measurement solution began almost a decade ago with the rise of Netflix and has only intensified since.
The Rise of Streaming and the Decline of Nielsen’s Dominance
For decades, Nielsen was the gold standard for TV ratings, with its measurements universally accepted. However, the emergence of streaming services like Netflix, Hulu, and Amazon Prime Video threw a wrench into Nielsen’s dominance. Initially, Nielsen couldn’t measure streaming viewership because it had no access to the data. Streamers like Netflix knew exactly how many people were watching their shows but often withheld or selectively released this information. Over the past two years, as streaming services like Netflix and Amazon Prime Video introduced ads, they’ve begun to share more data. However, the way they present this data makes direct comparisons difficult. For example, Netflix reports “hours viewed” and “views,” while Amazon Prime Video and Max focus on the number of “viewers.” These differing metrics create confusion and disagreement among industry players.
Take Amazon Prime Video’s reality series “Beast Games” as a case in point. Amazon claimed the show had over 50 million viewers in its first 25 days, making it the streamer’s most-watched unscripted series. However, an analysis by the Entertainment Strategy Guy, which compiled data from Nielsen, YouTube, Google Trends, and IMDb, concluded that the show wasn’t a hit or a flop but somewhere in between. This discrepancy shows how difficult it is to get a clear picture of a show’s success.
Nielsen’s Challenges and the Rise of Competitors
Nielsen’s traditional method of measuring viewership relies on a panel of several thousand households equipped with special devices to track their viewing habits. These households are used to estimate ratings for hundreds of networks, broken down by demographics like age, gender, and race. However, during the COVID-19 pandemic, Nielsen’s panel degraded because technicians couldn’t service some households due to stay-at-home orders. In 2021, the Media Rating Council (MRC) revoked Nielsen’s accreditation, a critical seal of approval for the industry. This opened the door for competitors like VideoAmp, Samba, iSpot, Comscore, and Luminate to challenge Nielsen’s dominance.
These upstarts claim to use more advanced techniques, such as big data from set-top boxes and smart TVs, to create more accurate ratings. Peter Liguori, executive chairman of VideoAmp, likened Nielsen’s methods to using an abacus in an AI-driven world. “They’re moving the beads from one side of the abacus to the other, and we’re using tech and big data and AI-machine learning to create the most refined, highest fidelity, highly credible measurement system,” he said. Nielsen, however, defends its methods, stating that it has been using advanced machine learning and AI for years.
The Industry’s Search for a Reliable Measurement Solution
The competition between Nielsen and its rivals came into sharp focus during a recent dispute between Paramount and Nielsen. Paramount, which owns CBS, Paramount+, and cable networks like MTV and Comedy Central, accused Nielsen of charging exorbitant fees—so high that they exceeded the ad revenue of some of its channels. Nielsen can charge midsize companies $50 million annually, with larger companies paying up to $300 million. Paramount switched to VideoAmp, leading to confusion when the Golden Globes aired. CBS, citing VideoAmp data, reported 10.1 million viewers, while Nielsen later said only 9.3 million tuned in. The discrepancy raised eyebrows across the industry.
Despite the challenges, Nielsen has taken steps to adapt. It now publicly discloses streaming ratings data and has regained its MRC accreditation. In a significant move, Nielsen also earned accreditation for its “Big Data + Panel” measurement, which combines traditional panel data with insights from set-top boxes and smart TVs. While VideoAmp and other competitors are gaining traction, Nielsen remains the industry standard, with most ad deals still relying on its data. Brian Wieser, an industry analyst, noted that while some marketers are frustrated with Nielsen, its superiority remains clear.
The Future of TV Measurement
The need for a reliable, industry-wide measurement system is more urgent than ever. Michelle Gelman, Nielsen’s senior vice president of product, emphasized that Nielsen’s role is more critical than ever in a world where data is abundant and interpretations can vary widely. Peter Olsen, a retired ad sales executive for A&E Networks, echoed this sentiment, saying that the industry needs an agreed-upon third-party currency to transact on. While ratings may never be 100% accurate, they are still the best way to measure success.
Looking ahead, the industry will likely adopt a hybrid approach that combines traditional panels with big data and AI. Companies like Nielsen and its competitors are experimenting with new ways to track viewership across platforms and devices. For example, Nielsen is working on a cross-platform measurement system called the.grid, which aims to integrate data from streaming, linear TV, and digital platforms. While progress is being made, the road ahead is complicated. In a world where viewers can watch content anywhere, anytime, the challenge of measuring what they watch will only grow more complex.
