Moving Target: The Problem With Mobile TV Ratings

The problem with measuring anything is rarely the technical challenge of figuring out how to do so. The methodologies and the research supporting them are pretty well understood.

The real hang-up almost always tends to be personal: who wants what measured - and for what reason?

In other words, what's in it for me - or - how do I stand to gain or lose.

That is the issue facing those who believe that ratings of television viewing badly undercounts those who are watching, especially from the prized 18-34 demographic, the one that advertisers believe are most likely both to respond - and to form long-lasting habits.

Nielsen and other ratings agencies are trying to meet the demands of advertisers and television networks without sacrificing (too much of) their credibility as impartial and objective assessors. But they face a client base who keep changing their mind about what they want. They agree that the current system is not providing an accurate evaluation of viewership habits, but they can not decide whether they are better off lumping mobile viewers with the sedentary traditionalists or creating whole new categories.

Whichever approach is chosen will have significant financial implications for TV shows and their sponsors. So whatever compromise is finally announced, it will most likely reflect the greatest potential for profit for the largest number of commercial participants. JL

Keach Hagey reports in the Wall Street Journal:

For mobile viewing to count, networks have to make ads show on tablets and smartphones the same ones as those running on TV. Some prefer to run a different set of ads online. Online ads typically reach younger viewers and are harder to skip than traditional television ads.

There is a whodunit dominating television as the fall season gets under way. Call it the Case of the Missing Viewer.

The amount of time that people are spending watching shows across various screens is increasing, according to Nielsen Holdings NLSN in Your Value Your Change Short position NV, yet the television ratings that programmers get paid for are sinking.

In fact, prime-time ratings in the coveted demographic of adults 18 to 49 years old were down so sharply in August from the previous year—5% in broadcast and nearly 10% in cable—that MoffettNathanson analyst Michael Nathanson suggested the Nielsen measurement model might be broken.

On Monday, Nielsen will launch a long-awaited fix that promises to measure viewing on mobile devices for the first time in a way that will show up in TV networks' ratings. Programmers had been calling for such a change for years, in hopes that accounting for viewing of their shows on smartphones and tablets might reveal that the ratings declines plaguing the industry aren't as bad as they seem.

But Nielsen's new mobile measurement capability is unlikely to move the ratings needle much for the broadcast season that kicks off this week. That is because, despite being announced to great fanfare a year ago with plans to take effect this fall, many TV networks and cable and satellite companies—including the biggest one, Comcast Corp.  CMCSA in Your Value Your Change Short position —haven't yet signed on.

"While a year ago I'd have said there would be a big bang and we'd see the ratings increase straight away, what we will see now is various stages and a slow increase in those ratings," said Megan Clarken, global digital product leader of Nielsen.

One reason for the slower ramp-up is that TV programmers are still trying to figure out whether they really want to lump online and mobile device viewing into the same big ratings number they use to measure viewing on a TV set.

The traditional TV rating used as currency in the roughly $70 billion U.S. TV ad market, known as "C3," counts viewership of commercials in the first three days after a show airs.

For mobile viewing to count toward this number, networks have to make ads show on tablets and smartphones the same exact ones as those running on TV. Some networks prefer to run a different set of ads online, either to make commercials more targeted to their audience or to reduce the overall number of spots. Online ads typically reach younger viewers and are harder to skip than traditional television ads.

"In terms of money per viewer, you are getting more for online streaming," said David Poltrack, chief research officer for CBS Corp.  CBS in Your Value Your Change Short position "So there is no incentive to try to capture that audience in the basic television audience by offering it to the advertisers who are buying your television product."

Most television programmers plan to sign up for the service by the end of the year, but are still evaluating whether they want the mobile viewing that Nielsen captures to count as online or traditional viewing.

Another reason for the slow rollout is that Nielsen needs the cooperation of cable and satellite-TV providers to measure viewership on mobile apps. Some of these companies haven't yet signed on to install Nielsen's software in their apps, including Comcast.

The cable giant's buy-in is important, not only because it is the biggest pay-TV distributor in the country, but also because it has one of the most robust streaming apps of the cable operators.

"We are in stages of conversation with them at the moment," Ms. Clarken said of Comcast.

Comcast is waiting to see which programmers sign on to the product before it signs on, but expects to be signed on before the end of the year, according to a person familiar with the matter. It is working out terms, including how the data will be handled, the person said.

It will likely be next year before mobile TV viewing is measured in a significant way, industry executives said, and it is impossible to predict how much lift, if any, it will give traditional TV ratings.

"It's going to be an indicator, but it's not going to be a complete rating," said Alan Wurtzel, president of research for NBC. "For now, I don't think anybody is going to be transacting on it, because it's just too soon."

Still, he called Nielsen's new product a "critical" step toward measuring viewing that has been going unmeasured as far as the main television ratings currency is concerned. For NBC's hit show "The Blacklist," for example, 17% of viewing happens outside the sphere Nielsen measures—on smartphones, tablets, computers, streaming set-top boxes or through video-on-demand services more than seven days after air date. For the younger-skewing, niche show "Parks and Recreation," that number was 37%, he said.

"That's a big number," Mr. Wurtzel said. "And it's only going to increase, because every year, use of these devices increases."