Nielsen to Measure Netflix Viewing
Effort Is Meant to Help Content Owners Gauge Impact of Licensing Shows
*By**Keach Hagey**and**Suzanne Vranica
Wall Street Journal
*****
***Nov. 18, 2014 7:31 p.m. ET*
http://online.wsj.com/articles/nielsen-to-measure-netflix-viewing-1416357093
<http://online.wsj.com/articles/nielsen-to-measure-netflix-viewing-1416357093?mod=WSJ_hps_MIDDLE_Video_Top#livefyre-comment>
Even as Netflix <http://quotes.wsj.com/NFLX> Inc. and other
streaming-video providers have expanded to reach 40% of American homes,
they have largely remained black boxes. They have refused to share data
on how many viewers watch TV shows on their services, and there has been
little independent data.
Next month, that will change, when Nielsen begins measuring viewership
of TV on subscription online video services for the first time,
according to Nielsen client documents reviewed by The Wall Street Journal.
The new measurement capability, which Nielsen meters
<http://blogs.wsj.com/cmo/2014/11/13/as-complaints-mount-nielsen-calls-for-new-ratings-standards/?>can
deliver without the assent of services like Netflix and Amazon.com
<http://quotes.wsj.com/AMZN> ’s Prime Instant Video, will analyze the
audio components of the program to identify which shows are being
streamed. (Nielsen is still working on a way to measure
subscription-video viewing on mobile devices, where such technology
won’t work.)
The effort is designed to help content owners learn more about the
impact of licensing their programs to these streaming players. Big media
companies have been generating revenue growth by selling Netflix and
Amazon streaming rights to their TV shows, but some are worried that in
the long run they could hurt their viewership on traditional,
ad-supported television, where they still make the vast majority of
their money.
“Our clients will be able to look at their programs and understand: Is
putting content on Netflix impacting the viewership on linear and
traditional VOD [video on demand]?” said Brian Fuhrer, a senior vice
president at Nielsen.
Netflix and Amazon declined to comment.
The data could ripple through Hollywood, changing the power dynamics in
the negotiations between streaming sites and TV studios that license
them content.
Currently, the streaming sites have outsize leverage when deals come up
for renewal, since only they know how much a show was viewed. The
information also will likely help talent in their negotiations with studios.
The Nielsen documents also contain some of the strongest data to date
suggesting that time spent on these streaming services is meaningfully
eating into traditional television viewing. Television viewing is down
<http://online.wsj.com/articles/pay-tvs-new-worry-shaving-the-cord-1412899121>7%
for the month ended Oct. 27 from a year earlier among adults 18 to 49, a
demographic that advertisers pay a premium to reach.
Meanwhile, subscribership to streaming video services has jumped to 40%
of households in September, up from 34% in January, Nielsen found. That
is a rate of growth that advertising agency executives who saw the
Nielsen document said they found shocking. Netflix accounts for the vast
majority of the viewership.
After people sign up for streaming video services, they watch less TV
than they used to, Nielsen found: 20% less, in the 18-34 demographic,
and 19% less in 25-54.
The report also found that people who are video subscribers, on the
whole, watch less TV than nonsubscribers: 20% less, among 18 to
49-year-olds.
“There is a certain indication that as you acquire (subscription online
video), your television use, in terms of traditional television use, is
going down,” said Dounia Turrill, Nielsen’s senior vice president,
client insights. But she said that overall video usage is increasing and
that more data are needed to draw definitive conclusions.
As television viewership dropped 8% in the 18-49 demographic in the
third quarter, media executives stuck to their regular script—largely
playing down the notion that Netflix and other streaming services are
sucking away viewers.
The media executives say they aren’t getting full credit from Nielsen
for consumption of their content on digital platforms. And they say
Nielsen’s decision to count broadband-only homes in its measurement
sample accounts for part of the decline in ratings. Philippe Dauman
<http://topics.wsj.com/person/D/Philippe-Dauman/501>, chief executive of
Viacom <http://quotes.wsj.com/VIAB> Inc., which owns Comedy Central and
MTV, last week said existing measurement services had “not caught up to
the marketplace.” Viacom has experienced double-digit ratings declines
<http://online.wsj.com/articles/viacom-beats-expectations-on-ninja-turtles-transformers-1415881443?>at
its major networks, including Nickelodeon.
Mr. Dauman cited industry data from comScore, Diffusion Group and
Nielsen, showing that the number of minutes of TV shows consumed on
subscription video platforms represented just 2% to 3% of the total
number of minutes consumed on traditional TV channels.
Todd Juenger, an analyst at Sanford Bernstein, believes that increased
streaming video consumption is the greatest driver of television’s
audience declines—and that those viewers aren’t coming back. He says
media companies are injuring themselves when they license their content
to companies like Netflix, pocketing the profits in the short term, but
feeding a beast that will devour them in the long term.
“You are taking viewers out of the ad-supported universe and putting
them into the non-ad-supported universe,” he said. “I don’t see how
that’s good for the economic health of the content industry.”
At the moment, Hulu—which has a free, ad-supported version—is the only
one of the three biggest streaming video players that works with Nielsen
to have its audience measured, and only on desktop computers, according
to a person familiar with the matter.
The new measurement service starting next month will cover Netflix and
Amazon, even though they aren’t actively participating. Netflix has said
in the past that it doesn’t need to release its viewership data since it
doesn’t sell advertising.
In the beginning, companies will be able to view program ratings only
for their own content. But as the tool ramps up, clients will likely be
able to subscribe to syndicated viewership data to see ratings of their
competitors, just as they do now with traditional TV ratings, Mr. Fuhrer
said.
_______________________________________________
Medianews mailing list
[email protected]
http://etskywarn.net/mailman/listinfo/medianews_etskywarn.net
