Thursday, February 7, 2013

TV Ratings, The Original Analytics



Let's be honest, before Netflix, Youtube, Hulu and for that matter the internet, we all sat in front of the TV and spent our nights watching Dallas, The Cosby Show, and Walker Texas Ranger (extra emphasis on Walker TR).  This was the golden age of television, back when the DVR consisted of a large analog appliance that sat on top of a tube television known as a VCR, which required a cassette tape with enough time left on it (after taping Star Trek and Webster) to "tape" your show.  There was no GUI that allowed you select the specific show you wanted to watch and put you nicely at the beginning. Oh no, these were the good old days, if you wanted to watch something at the end of your tape, you were forced to fast forward through all the episodes of Knight Rider to find what you wanted.  I miss these days, both the Hoff and Chuck Norris were famous the real way.

The Nielsen Rating Company has been around since before the television even reached critical mass.  originally, the company rated radio programs for marketing and advertisers in the 1930's but quickly switched to television in the early 1950's as this "new fangled contraption" entered the living room of most Americans.[1] Nielsen has created a system for determining audience size and composition for television programming and is the most prominent rating company in the United States.  In my opinion, this was truly the beginning of analytics as we know them today.  They use a mixture of paper diaries and data received from their set top boxes to determine which programs are being viewed.  They are probably better know for their “Nielsen Families” which is the term they use to describe the families who have consented to allow a Nielsen tracking box to be placed in their home.[2]

            To be honest, I don’t know anyone who lives in a “Nielsen Family” and frankly I think it’s a little creepy. In the days of analog TV most of the tracking was done via paper or phone surveys conducted a few times a year by the company.  Nowadays the technology has increased exponentially and is actually even creepier.  The new box that’s installed in the consenting family’s trailer, I mean home, is plugged into the digital decoder of whichever service the family is using (Dish, DirecTV, Comcast, Cox, etc) and feeds data back to Nielsen every time the boob tube is used. The previous generation of Nielsen boxes required that different family members use a remote to sign in to the box before viewing and hit a button every forty-five minutes to prove they were still watching.[3]  However, the technology has now achieved the level of sophistication where the box uses recognition technology through a camera that can recognize who in the family is watching TV and how long they spend doing it.  If you're watching Star Search and leave the room to use the bathroom and get some nachos, the box knows you’re gone and stops recording data.  This sounds awesome, especially for the $50 per year they pay their families.  Yep, that’s it, for about fifty bones a year they completely own your viewing data and use it to make a lot of money.  What if I want to watch TV naked, do they know I’m not wearing clothes?  Probably. Perverts.

Who are these people that want to participate in this? Actually there are several criticisms of Nielsen and their practices.  They only currently use about 25,000 households in the US to represent a population of about 114,500,000 TV watching households.[4]  For all those of you out there with a calculator, this is only about 0.02% of the population that is determining what shows succeed and which ones fail (in network TV, shows live and die by the Nielsen rating).  This is probably the reason that “Arrested Development” was cancelled, the humor and dialogue was just too intelligent for most people that would allow Nielsen to put a “spy box” in their doublewide.

Another criticism of Nielsen is that they can’t adequately account for Internet watching demographics.[5]  This is shortcoming of the data presented by Neilsen and further creates doubts about the accuracy and validity of their TV analytics.  Also, this is causing millions of dollars in ad revenue to be shifted from standard television to other mediums. 

For years Nielsen Ratings has been the one stop shop for marketers and TV networks to see who is watching what and when.  With the introduction of new streaming technologies and the proliferation of web based viewing, the consistency and accuracy of the Nielsen numbers are undoubtedly in question. These guys invented metrics like time spent on the page, bounce rates, viewer demographics, etc.  Nielsen laid the foundation for the analytics that now track your every move on the worldwide interweb.

Here are some interesting Nielsen Stats:[6]

·      The average American watches 34 hour of television per week
·      45% of homes have a DVR, but roughly 90% of all shows are watched live

Here’s a breakdown of media usage from Nielsen: