The world of television is undergoing a belated transformation thanks to the internet. While many other industries have been quick to utilise online services to change the way they operate, television networks around the world have been resistant to change. However, with the advent of services such as Netflix, as well as the apparently imminent launch of an Apple-branded smart television, media networks are starting to realise they need to embrace the online world if they are to survive.
The traditional model for making money from television through advertising has been shaken by the advent of subscription services. At the same time, maintaining an accurate analysis of people’s online viewing habits has proven difficult. The dominant player in audience metrics has been US firm Nielsen, which has aided both television networks and advertising agencies in their quest to know the habits of viewers, allowing for targeted adverts during specific programmes. However, with the advent of online viewing, it has become harder to tailor specific adverts around shows as people choose to watch them at different times.
Nielsen has traditionally measured audience information through a mixture of diaries kept by, and devices attached to the televisions of, a sample of viewers. Across the US, the devices record what a range of people watch, giving television networks an idea of which shows are most popular, and in turn providing ad agencies with vital information about the sorts of programmes their target audiences watch.
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While the way in which people watch television remained largely the same over the last half a century, the shift online over the last few years has presented the industry with a problem. With people watching shows on demand and on new devices, there hasn’t been a unified platform that has allowed traditional networks to measure the ways people are engaging with their content.
Services such as Netflix and Amazon Prime now allow viewers far greater flexibility in how they watch programmes. Not only are people watching shows on demand, but the traditional form of a family sitting down to watch the same shows has also declined. People are far more likely to slip off to their own rooms with their various internet devices to watch what they want, than to put up with the democratic, middle-of-the-road choices that so often occur in a shared living room. Whereas a simple television was once the single method of watching programmes, now viewers are able to use tablets, laptops, desktops and their phones.
Nielsen has therefore come up with a new platform, in partnership with software giant Adobe, that will measure digital video across these different devices. The partnership is one that seems a decent fit, with Nielsen being the dominant television ratings agency and Adobe having large amounts of information on online users.
Both companies have stressed how important the new platform is. In a statement announcing the news, Megan Clarken, Nielsen’s Executive Vice President for Global Product Leadership, said: “This alliance is expected to accelerate the adoption of consistent and comprehensive measurement in digital. By integrating our technologies, together we’ll be able to offer our customers a more seamless and efficient way to plan and deliver against their audiences.”
Adobe’s Senior Vice President and General Manager of Digital Marketing, Brad Rencher, added: “Online TV consumption is at an all time high and Adobe and Nielsen are two leaders coming together to standardise audience measurement for digital content. Major media companies and broadcasters already depend on Adobe to bring TV across screens and better understand digital viewer engagement. Once complete, our partnership with Nielsen will provide analytics tied with ratings – benefitting advertisers, media companies and consumers alike.”
Analysts believe that the move to a digital platform for Nielsen was long overdue, with Luca Paderni of research firm Forrester telling Reuters: “A lot of Nielsen clients were complaining and pushing them over the past years that its methodology was not for digital devices.” The move has been widely supported by the industry. Artie Bulgrin of leading US sport channel ESPN said in a statement: “One of the challenges in digital measurement has been the lack of alignment between site analytics and syndicated measurement data, and we will be working with Nielsen and Adobe to help resolve this.”
Turner Broadcasting’s Chief Research Officer Howard Shimmel was also enthusiastic about the need for a platform that matched the new ways in which people were watching media content: “As consumers expand their video consumption across screens, the media industry needs stronger digital and cross-platform measurement to accurately track consumers and better monetise cross-screen audiences. Adobe’s strength in analytics and history in bringing together video and complementary content across platforms, combined with Nielsen’s strong audience measurement capabilities, will accelerate development and adoption of a single digital currency, which is what the industry needs.”
It was also warmly embraced by ad agencies, with IPB Mediabrands’ CEO Matt Seiler saying: “The ability to provide metrics to measure audiences accurately, allowing IPG Mediabrands to better allocate marketing dollars, across every major IP device is an important step in our quest to automate 50 percent of our media buys by 2016.”
It is clear the television industry is undergoing a dramatic change, with online being the key battleground for networks and programme makers. Networks are seeing upstarts such as Netflix and Amazon encroach on their territory, offering original content. At the same time, Apple is rumoured to be on the verge of entering the smart TV market, overhauling the way in which people choose the shows they want to watch.
A big marker of this shift is the recent news that cable network HBO will be making its popular HBO Go digital app independently available. Until recently, the company had been opposed to allowing people to access on-demand digital versions of its programmes without a subscription to the cable service. However, after considerable demand from users – as well as the dramatic surge in popularity of standalone services such as Netflix – HBO has decided to cut the cord. CBS has since followed suit, while other networks are thought to be considering similar moves.
Services that already exist purely online have welcomed Nielsen’s move towards measuring digital content. Crackle, an ad-funded streaming television and film service, was particularly keen. The firm’s Eric Berger said in a statement: “Crackle is the only premium ad-supported network that lives purely on over-the-top devices and there is tremendous value in understanding how people are consuming content. Being a part of the initial rollout will enable us to present real-time engagement metrics, allowing for advertisers to understand the true return on their investment and match our growing audience on Connected TV with blue chip brands at scale.”
It may seem to have been a long time coming, but the television industry is finally getting round to realising the potential of the internet. Networks that have traditionally relied on advertising revenues for their funding have found that standalone subscriptions services that live solely online are presenting viewers with a far more compelling and flexible service. Nielsen’s move online could be the thing that helps networks fight back.