Nielsen To Measure On-Demand Audience
Service is certain to lure more network shows to VOD
By Ken Kerschbaumer -- Broadcasting & Cable, 5/29/2005 8:00:00 PM
Bowing to client demands, Nielsen Media Research says it will measure video-on-demand audiences in the second quarter of 2006 and incorporate those numbers into its standard ratings.
TV programs accessed on VOD within seven days of the original TV airing will be classified as “recently aired TV programs.”
Nielsen says the VOD-ratings rollout will follow a January 2006 introduction of a DVR-ratings service. Active/passive meters that collect audio codes embedded in a program will be able to tell when a VOD program was watched.
By fourth quarter 2006, Nielsen, which is owned by NMR, will add VOD-viewer estimates for theatrical movies, pay-per-view events, older TV programs and other programming defined by Nielsen as “library content.” Today, about 25 million TV households have access to VOD; only about 20% are paying customers.
CBS, for one, says the new ratings make it more attractive for all networks to place top programs on VOD, which they have been hesitant to do because VOD viewers aren’t counted. Before quality content is released on VOD systems, free or paid, says David Poltrack, CBS executive VP, research and planning, revenue-sharing models will need to be developed that satisfy anyone who has an ownership stake in a program: “We still have a lot of work to take place to figure out the right model.”
ADDING VOD TO THE MIX
Networks and cable operators have been asking Nielsen to figure out how to add VOD into the ratings mix for a while, says Sara Erichson, general manager of national services at Nielsen. “It’s really just another form of time-shift, especially for the top content,” she adds. “We heard loud and clear from both the MSOs and the content owners that they needed to understand when people watch programs on VOD and if that viewing data could be rolled into the standard reports.”
Beginning next January, Nielsen will begin offering three reports: live standard ratings, live ratings plus 24 hours of playback activity (at first, just DVR) and then live ratings plus seven days’ playback activity. Erichson says some believe the live ratings will be the most pure while live-plus-seven-days will add the most viewers to the data. But she thinks live-plus-24-hours might be the most accepted, because most DVR use occurs within the first 24 hours of an original airing.
RIGHTS FEES AN ISSUE
Of course, getting top-rated content like CSI or American Idol on VOD won’t be easy. Rights fees promise to be an issue that could delay the offering of prime time or syndicated content. But Josh Bernoff, an analyst at Forrester Research in Cambridge, Mass., says the potential for even the slightest uptick in ratings could make content owners more open to VOD. “I’m still waiting for the day when a network negotiates to have the VOD rights as well as broadcast rights,” says Bernoff.
The Nielsen service grows exponentially at the end of 2006, adding ratings for potentially tens of thousands of programs in the libraries of cable operators. “Right now, Comcast has 5,500 programs in its VOD library,” says Bernoff. “If someone thinks Speed Channel has problems with low ratings, just wait until ratings are taken across all of that VOD.”
At the moment, those audiences, nearly infinitesimal, are unattractive for traditional media buys; instead, advertisers and cable operators will place ads before or after the content or insert them into commercial breaks within the VOD program. The trick is figuring out how to technically match up the file that contains the commercial with the program and then deliver it to the viewer.
Vendors are working on solutions. SeaChange, for example, introduced On Demand Advertising System version 1.0 at the Cabletelevision Advertising Bureau’s (CAB) annual sales conference in Chicago on May 24. The software resides in the cable system’s VOD system and can insert advertisements into individual streams (it can also allow targeted advertising to the ZIP code-plus-four level). Kraft, for example, could advertise breakfast foods in the morning, lunch foods at noon and coffee in the evening within a cooking program.
ADVERTISING WITH VOD
“Every MSO is doing some advertising with VOD,” says James Kelso, SeaChange VP/general manager of broadband systems. “In some cases, VOD ads are as simple as long-form advertising on a VOD shelf, and in others, it’s ad insertion down to the ZIP-plus-four level.” The cost of the system is about $250,000 for cable systems in the top 50 markets.
Atlas, a company that has designed software that lets ad agencies place advertising on multiple Web sites without needing to negotiate multiple deals, now wants to bring that same ease to VOD. Buying spots will be as simple as selecting a budget, frequency and the type of audiences the buyer wants to reach, says Scott Ferris, a senior VP for Atlas On Demand. Atlas On Demand then sends that information to the cable operator, which sends the right ad from the Seachange video server to the right home.
“It basically reaches into the VOD system and places orders based on viewer metrics,” says Kelso. “Think of it like the Saber Airline Solutions for booking airline tickets.”
Bernoff, however, says there isn’t a demand for technology like Atlas On Demand—yet. He recently released a report on VOD advertising that said that buyers and sellers have much more fundamental problems: like figuring out whether VOD ads should be bought from the cable operators—or the networks. More important, he says, “the problem is persuading advertisers they might want to actually advertise.”
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