Left Coast Bias: Whiney Networks

Networks kvetch about inadequacy of Nielsen and audience measurment

So Phil Gramm says we're a nation of whiners. Sorry, sir, if we're not having a lot of fun paying 10 bucks for a gallon of gas and watching jobs disappear like an aspiring actress' waistline.

Now if you had been talking about television network executives, I would have agreed so wholeheartedly I would have hired you to chair my own campaign. It would've been a great career move for you since short, balding Jewish Minnesotans are infinitely electable. Plus the only thing I'm running for these days is the fridge.

But when it comes to talking about ratings, and especially the Nielsens, all the networks do is kvetch that their shows' true reach is not being counted. So my question is, if viewership on any platform is the currency on which your already-shaky business model relies, isn't it time to finally own it?

Translation: Please either spend the dough to finance an alternative or quit griping about Nielsen already. Yes, each network independently has its own initiatives, but it's time to band together and act.

Here's the quick scene-setter. About $60 billion gets pumped in annually through the television advertising mechanism. The currency of said mechanism is ratings from Nielsen, which TV execs would say has about the same reliability as Greg Norman's chances of winning on a Sunday at a major golf tournament.

Network executives bash Nielsen for sport. CW chief Dawn Ostroff even went political at the recent press tour when she that “No viewer should be left behind.”

But the agency side agrees, and everyone is frustrated by the limitations of the system, from its lack of out-of-home viewing getting counted to the sample size for Nielsen simply being too small.

So if a $60 billion industry—and one that right now is absolutely under siege by changing technologies and viewing habits—is totally reliant on something that no one thinks works, why not pull up this moment and fix it?

For one thing, it's not cheap. We're talking nine figures, easy. But it's not just startup costs. It would have to be bankrolled until it replaced Nielsen, if it indeed won out.

“You have to make a commitment that you are going to be supporting it for a period of time during which it won't be the currency and you will still be supporting the currency,”says one network executive. “And that's what my CFO has a hard time swallowing.”

But that executive also says the obvious is true—an outlay of a couple hundred million dollars, split among several companies on either side of the advertising transaction, is becoming necessary.

“Now people are recognizing that if money is flowing out of TV because advertisers are unable to document the effectiveness of TV, and are uncomfortable with the lack of ROI information versus the Internet, stopping that outflow of funds alone would more that justify the investment,” the executive adds.

And there is more entrepreneurial activity now than ever in the mix. Some outside companies are making inroads, like TRA, TNS Media Intelligence and, since they are taking over everything else, Google.

The networks couldn't care less who comes up with the silver bullet, as long as there is one. “I hope some guy in a garage in Silicon Valley or some guy in Israel can help,” acknowledges NBC research chief Alan Wurtzel, who says networks are on “Nielsen crack” by programming to a certain ratings season in this day and age.

But for that habit to be broken, all of the networks would have to band together and support one new format financially and otherwise, and then get the ad agencies and their clients on board. The networks are at least talking to each other about this now.

That may be the first step toward leaving all the whining behind.

“It's Nielsen's to lose,” says NBC's Wurtzel. “If we don't figure something out, it's shame on us.”

E-mail comments to ben.grossman@reedbusiness.com