REPORT: Nielsen to Measure Netflix, Amazon Viewership

/ Nov 19, 2014

netflixTV

Netflix and Amazon famously don’t provide ratings on who’s watching what on their respective SVOD services. That’s going to change soon, though not at the hands of either company.

Starting next month, Nielsen will provide some viewership metrics on content available on Netflix and Amazon Instant Video, according to The Wall Street Journal. The measurement firm will be able to do this by monitoring video consumption among those who participate in its nationwide consumer panel.

This will be independent data, unverified by Netflix or Amazon, who declined to comment for the report. Nielsen will use audio-recognition technology to identify which shows are being streamed.

The tracking won’t be comprehensive. For one, Nielsen will only provide data on desktop-based viewership, not accounting for consumption on mobile and connected-TV devices, which it’s said to be still working on. In addition, companies at first will only have access to viewership data for their own content. The ability to compare SVOD ratings with other shows and networks will probably come at a later date, WSJ said. (This means that those hoping to compare how a linear TV show compares to, say, “House of Cards,” will still have to wait a bit.)

The overall goal, according to Nielsen, is to give the TV industry a better idea on how their shows are faring on SVOD platforms. Because the company’s data suggests the worst — that SVOD is eating into TV ratings.

According to Nielsen, TV viewing was down 7% last month among the coveted 18-49 demographic, when compared to the previous year, and 8% in the third quarter overall. Meanwhile, subscriptions to streaming video services grew to 40% of US households in September, up from 34% in January.

What’s more, after people sign up for streaming services, they watch less TV (20% less among adults 18-34, 19% less among adults 25-54). Video subscribers on the whole watch less TV than non-subscribers (20% less, among adults 18-49), per Nielsen.

What this suggests, again, is that people are watching as much as — if not more — TV content than they used to, just not in the fashion that the TV industry prefers.

How can that be fixed?

One way is for them to sell less of their shows to Netflix and Amazon. But as Bernstein Research analyst Todd Juenger recently noted (subscription required), that’s not a serious option. Content owners will either lose out on easy syndication money, or risk even more ratings erosion by making it difficult for viewers to watch their favorite shows unless they buy individual episodes or seasons, or pirate them (guess which one is more likely).

Investing in Hulu is another option, as Rupert Murdoch recently proposed. The service is already measured by Nielsen — though only on desktops — and offers next-day access to many current TV shows, which Netflix and Amazon aren’t able to. (Hulu’s recent investments in original programming can also raise its profile among those seeking out premium, TV-like content online.)

Then there’s the digital, direct-to-consumer option, which some networks and content owners are already planning to do.

None of these solve the larger problem, though. Viewership of linear TV, where most of the money still comes from, is declining, and digital measurement is nowhere near where it needs to be to accommodate the shift in viewer behavior.

To that end, this news from Nielsen, as well as other initiatives by the firm to measure digital video viewership, could help the TV industry in the long run. But that’s going to require all participants — content owners, networks, advertisers — to come together and agree on how to assess a show’s total audience, and then make decisions based on that data.

That’s going to take some time — we’re talking about change in an industry designed to impede change. But it’s coming. Just look at all that’s happened in the past few months, let alone the past few years.

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  • nerdrage

    Best reporting on this news I’ve seen so far, and the only story I’ve seen that delves into the upshot – what to do the studios do when (probably not if) Nielsens tells them their geese are cooked? But isn’t another option for them to attempt to strong-arm Netflix and Amazon into increasing their licensing fees (assuming they accept the data at all – since it won’t cover Roku etc or any mobile devices, I sure wouldn’t.)

    So the bigger story here is: Nielsens is desperate for relevance in a business that is evolving away from the ad-based model, so they’re scrambling and announcing vaporware.

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