Leveling the Field
By Kathy Haley -- Broadcasting & Cable, 11/24/2002 7:00:00 PM
Cable operators' ad sales efforts could get a small boost late next year, thanks to planned changes in the way Nielsen lists cable viewing in its local ratings reports.
| Wired Cable Audience Growth | |
|---|---|
| Total day, third quarter aggregate household delivery | |
| Total Day | Primetime |
| Source: CAB/Nielsen National People Meter Data/top 50 markets |
|
| 2000: 11.9 million | 21.5 million |
| 2001: 13.2 million | 23.8 million |
| 2002: 14.5 million | 25.8 million |
Nielsen is lowering the audience threshold cable networks must meet in order to be listed and it will also begin listing cable programs in the same section in which broadcast programs are listed in its reports.
The changes, set to be in place by fourth quarter 2003, could more than double the number of cable networks that appear in local ratings reports. They could also make it easier for media buyers to consider cable when building schedules.
Tom Olson, president and CEO of National Cable Communications, offers an example of what the changes could mean. "If you were to open up the Viewers in Profile book for Chicago today, you would see 22 cable networks reported, but they would only appear in the daypart section, not in the section from which buying is done," he says. "In the time period section, from which most of the buying is done, you would see no cable networks listed."
Under the planned changes, as many as 57 cable networks would appear in the Chicago report, and they'd be listed in the time period section, Olson says.
The influx of new networks is expected to occur after Nielsen lowers the minimum audience share cable networks must earn in order to be listed in a local ratings report. Currently, cable networks must reach at least 20 percent of households tuned in, quite a bit more than the 9.5 percent threshold TV stations must meet. Cable's threshold is higher because Nielsen has considered its signals "out of market" rather than local.
The Cabletelevision Advertising Bureau has argued the threshold for both broadcast and cable should be 7 percent, but Nielsen, which hasn't yet said what threshold it will use, is expected to simply extend the 9.5 percent threshold to cable.
Broadcasters don't seem alarmed by the planned change, maintaining that agency buyers don't really use local ratings anyway. "Advertisers aren't buying cable because of its audience," says Alan Picozzi, vice president and director of research at Petry Media Corp. "They're buying it because it's cheap, flexible and gives them a lot of promotional capability. It's a reach enhancer."
The Television Bureau of Advertising has gleefully pointed out, in fact, that cable could take a hit from another planned Nielsen change, also set to take effect next fall. The rating service plans to begin subtracting out local viewing via alternative delivery systems, such as satellite TV. This is important to advertisers, because satellite homes can't see the local commercials aired in cable households. The TVB argues that ratings for wired cable commercials will fall once the change is made, estimating, for example, a 40 percent drop in Springfield, Mo., and a 30 percent fall in Dallas.
This is clearly a concern for cable, particularly in light of the basic subscriber losses listed by several of the largest MSOs in their third quarter reports. The impact of the planned Nielsen change may be less than many broadcasters anticipate, however, largely because agency buyers and cable ad sales reps have been estimating satellite's impact for several years now, and subtracting it from the cable ratings they use to craft media schedules.
"We have been adjusting our numbers all along," Olson says. "Our entire audience data base contains cable-only numbers." The CAB adds that, despite satellite's subscriber inroads, wired cable audiences have continued to climb significantly over the past three years (see chart).
Even if satellite takes a bite from wired cable's local ratings in the coming years, the impact is likely to be more than offset by the other planned Nielsen changes, particularly those having to do with lowering the audience share threshold networks must attain to qualify to be listed.
"The important thing to remember is that there's been an uneven playing field, and Nielsen's planning to level it," says Jonathan Sims, vice president of research at the CAB. "The lowering of the cume standard will mean a one-time boost in the [gross rating points] we have available to sell locally. There will be more cable rating points showing up in syndicated tape reports than ever before."
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