ViacomCBS, Walt Disney, Fox and other big TV companies say Nielsen, a company with an audience-measurement technology that usually helps the TV business, is going to hurt it come autumn.
The big U.S. media companies that pay the TV-ratings kingpin millions of dollars in fees every year believe Nielsen’s decision to delay adding so-called “out of home” viewers to its counting of national TV audiences could have a serious effect on the next TV season – at a time when the industry is facing some of its greatest challenge.
“‘Blindsiding’ is perhaps the politest way of characterizing how under-communicated and contradictory this morning’s announced decision from Nielsen was,” said Sean Cunningham, CEO of the VAB, an industry trade group that represents the ad-sales departments of 14 different media companies, in In a letter sent Thursdaay to Nielsen CEO David Kenny. Nielsen’s decision “was received as an extremely BAD SURPRISE by my industry leaders, who were stunned by the lack of dialogue about this decision/topic,” Cunningham added.
Nielsen declined to comment on the letter or to make executives available for comment.
At issue is an effort by the U.S. media business to get credit for the viewers watching TV programming in bars, offices, hotels – and even other people’s homes. This “out of home” viewing has been measured by Nielsen in a separate accounting, and even used by networks like Disney’s ESPN to make certain types of deals – but has not been part of the ratings activity that forms the currency for striking deals between TV networks and advertisers.
In announcing its decision yesterday, Nielsen pinned its switch on the continuing effects of the coronavirus pandemic. How can it measure out-of-home activity when fewer people are moving about out of home? “The recent surge in COVID-19 cases is expected to create further volatility in this space, making it challenging for the industry to plan around this audience segment,” the company said in a statement.
But the TV networks have a different view (not the kind that can be measured and sold to Madison Avenue): “There is a flagrant contradiction in Nielsen’s announcement,” said Cunningham, in his letter. ‘It deems your OOH data as currently unfit for integration, yet it is then offered as a second stream solution for ‘allowing the industry to transact on this data.’ The Nielsen OOH data is either fit to be currency or it is not. In short, ‘you can’t have it both ways.'”
The dispute erupts at a particularly fraught moment for the media industry. Many advertisers have pulled back during the pandemic. Sports broadcasts have been scuttled for months and production of the scripted programming that commands hundreds of thousands of dollars from advertisers is not possible to do safely as of yet. TV networks currently face a protracted “upfront,” that annual process under which they try to sell the bulk of their ad inventory for the coming year. Many advertisers and media buyers have pressed for significant cutbacks in the rates of reaching 1,000 viewers – a measure known as a CPM that is central to these talks.
The media industry has good reason for wanting to count as many viewers as possible – even if they might be sipping on a bourbon as they watch. Simply put, TV viewership continues to erode as viewers migrate to streaming-video services ranging from Netflix and Amazon to Tubi and Pluto, where they can watch many of their favorite scripted and unscripted programs at times of their own choosing.
The out-of-home numbers were expected to favor two kinds of programming that, at present, represent the industry’s saving grace: news and sports. These shows still draw large, live audiences that Madison Avenue continues to desire. Counting out-of-home viewers was expected to give some networks an 11% boost for sports broadcasts and a 7% lift for news programs. CBS, which is scheduled to broadcast Super Bowl LIII in 2021, had been anticipating an increase of between 10% and 12% in total viewership for the game, if not more – a prediction it has no doubt been using in its quest to enlist sponsors for the gridiron classic.
Indeed, ViacomCBS has been the only media company so far to take a public stand against the Nielsen decision. “Nielsen’s abrupt delay of the long-planned integration of out of home viewing into the national TV currency less than two months before it was scheduled to be implemented is unacceptable and unjustifiable,” the company said in a statement released Thursday evening. ” ViacomCBS – along with our peers and the [trade organziation] VAB – is calling on Nielsen to reverse its decision.” The VAB’s Cunningham also called upon Kenny, the Nielsen CEO, to return back to the industry’s original plan.
Fox Corp., WarnerMedia, NBCUniversal and Walt Disney did not respond to queries seeking comment or declined to make executives available for comment.
One important constituent may be skeptical of the new audience. Some media buyers and researchers suggest there is less value in catching the attention of someone watching a baseball game at a bar or a morning business-news update on the trading floor of a brokerage. These executives caution that viewers in these situations may be distracted by activity around them or even watch TV with the sound off – rendering some TV commercials less effective or memorable. One buying executive called the effort “a blatant attempt to monetize a less valuable audience.” If TV networks are indeed under new pressure from advertisers, perhaps 2020 isn’t the year to introduce measurement that has some detractors.
Nielsen intends to explore the idea of including out-of-home viewership in its national ratings next year. “Fall 2020 is not the ideal time to integrate this measurement into currency,” the company said, noting it ”is prepared to complete the integration when appropriate and will reassess the situation in Q1 2021.”