Advertising and Marketing

Media Companies Counting on New Measurement

Call for including online viewers, tablet users to offset declining ratings 1/07/2013 12:01:00 AM Eastern

So far this season, ratings for the
big broadcast networks have been
down, continuing an ongoing pattern
of audience erosion.

But it’s different this time. With use of digital
video recorders hitting a critical mass and
more people accessing content online and via
video-on-demand on a variety of devices, network
executives have become like petulant
Little Leaguers, striking out and then blaming
the umpires because they can’t get a hit.

In a steady drumbeat designed to ward off
the mojo of a lethargic scatter market and expectations
of doldrums after 2012’s Olympics
and elections, media company honchos are
chanting a new mantra: People are watching
their programs, but they’re not all being
counted, because of when, where or on what
device they’re watching.

Can Ratings Rebound?

Early returns for the 2012-13 season show
audience declines at Fox, CBS and ABC, with
NBC, which had been the last-place network,
rebounding on the strength of Sunday Night
Football
and The Voice. None of the shows introduced
at last year’s upfront appears to have the
makings of a breakout hit. In fact, the biggest
scripted series sensation with the 18-49 audience
last fall was The Walking Dead, which appeared
on a cable network, AMC.

David Poltrack, chief research officer for
CBS and senior defender of the broadcast
networks, said the season had gotten off to a
“chaotic” start, disrupted by factors ranging
from shows making early debuts to political
preemptions to Superstorm Sandy.

Nevertheless, erosion appears inevitable. Fox,
which suffered the deepest declines in the fall,
is getting some buzz from midseason show The
Following
, but the network is very dependent on
American Idol, which isn’t getting any younger.

Can You See 7?

With ratings trends raising concern on Wall
Street, Walt Disney CEO Robert Iger and CBS
boss Leslie Moonves both recently told investors
the ratings used for ad sales should
be changed. Instead of counting the people
watching commercials over three days—the
current C3 ratings—they want seven days’
worth of viewing to count. “I think we’ll have
C7 within a year and a half,” Moonves said
at an investors’ conference in December. “I’m
willing to bet a lot on that.”

Of course, some advertisers won’t go along
with paying for commercials seen seven days
after they air. One possible outcome among
the largest media investment companies, according
to Irwin Gotlieb, CEO of GroupM, is
a market that runs on more than one currency.

Making TV Everywhere Count

In addition to delays caused by widespread
DVR use, viewing is moving from the TV set
to online and to other gadgets. TV Everywhere
is spreading, as new distribution deals
allow subscribers access to programming in a
variety of ways. “I would hypothesize in the
next few years there will be more erosion in
TV delivery to alternative mechanisms, starting
with this guy,” Gotlieb said recently, holding
up his iPad.

Media companies and agencies, which are increasingly
turning to multiplatform campaigns
to follow and engage with viewers wherever
they are, won’t pay for viewing on new alternative
devices unless viewers are counted.

Viacom CEO Philippe Dauman said his
company is working with Nielsen and other
research companies on multiplatform measurement
and that he’s encouraged by the
progress he’s seen. “We are going to benefit
enormously in particular from measurement
of viewing on other devices because our audiences
are the ones who are spending incremental
time on other platforms,” he said.

The Other Stream

Advertising isn’t the only revenue stream under
pressure. Historically, subscriber fees have
done nothing but go up, but now distributors—
squeezed by a weak economy and rising
sports programming costs—are sounding the
call that not only should rates not rise, but operators
will stop paying for low-rated channels.

“We’re going to take a hard look at each
service, and those services that cost too much
relative to the viewership, we’re going to drop
them,” Glenn Britt, CEO of Time Warner
Cable, told the December investment conference.
First network to be dropped: Ovation.

For programmers, that sounds like the start
of another staring contest. In 2013, we’ll see
who blinks first.

E-mail comments to
jlafayette@nbmedia.com and follow
him on Twitter: @jlafayette

 

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