By Adam R Jacobson
RBR + TVBR
December 8 was Nielsen 2016 Analyst Day for the global audience measurement giant, and the company put on a highly polished six-hour affair in New York for the investor community with one clearly established theme repeated throughout the mini confab.
As far as it is concerned, Nielsen has the framework in place to process, with accuracy, the data reflective of actual consumption across all devices.
Gone is the concept of traditional TV ratings of yesteryear, or last year, Nielsen’s top brass notes.
The company says its ready for prime-time on the new ratings delivery needs, declaring itself the third party measurement service provider the industry can trust.
With high-profile PPM issues in the radio industry still being questioned and the use of the electronic measurement tool set for incorporation with Nielsen’s TV ratings, investors may be wondering if Nielsen is a little too confident with its internal outlook.
Shares were down in excess of 3% in mid-afternoon trading on Thursday, to $42.06 — the lowest level for NLSN shares since Thanksgiving 2014.
Speaking to attendees following a short coffee break, Nielsen President/COO Steve Hasker played up his company’s efforts to bring total audience measurement tools to market. “The closer the data gets to syndication, the closer it gets to Wall Street and to distribution,” he said. “Real data will be in the marketplace, and it will be Nielsen-quality.”
But what is “Nielsen-quality”?
Don’t ask ESPN. The huge dip in November 2016 Cable Network Coverage Area Universe Estimates, which the company concluded as accurate after an intense week-long review by many staffers, remains a huge point of contention with the Disney-owned sports and entertainment brand, which saw massive drops in its UEs.
Meanwhile, a PPM problem that many radio stations are still asking questions about hangs as a dark cloud over Nielsen.
In early November, Nielsen Audio swiftly responded to a glitch that impacted data collection in some 8% of all installed Portable People Meter (PPM) devices across all 48 markets for the first week of the December 2016 monthly survey period.
What caused the problem? We still don’t know.
What we do know, and Hasker acknowledges, is a shift in viewing to digital platforms.
“There is less live TV viewing, but the viewing is going to connected devices,” he said, noting that smartphones and tablets were leading the types of devices where viewing was happening.
Thus, he reminded analysts in attendance, “Consumers are spending more time of media,” with much of it being video.
“There are tailwinds, and time being picked up from TV is going to digital delivery devices,” Hasker said.
Interestingly, the first three quarters of 2016 indicate that an increase in live TV consumption has been seen, compared to the past two years.
This could be an anomaly tied to the U.S. presidential election, the Summer Olympics, and other live sporting events of note — despite all of the talk surrounding big declines in National Football League prime-time ratings.
DIGITAL GROWS AS THE WEEKS DEVELOP
Another key takeaway from Hasker’s presentation is that, as a show enters its fifth week, digital viewing grows in importance.
In Week 1, some 70% of consumption of a TV show is done via DVR; 25% of Week 1 consumption is done via live TV viewing. Just 3% of viewing is done via digital platforms.
By Week 2 of the show’s availability, digital creeps in at 21%, with DVR still dominant at 79%.
It is not until five weeks out from a show’s broadcast airing that digital becomes a force, attracting 40% of the show’s audience.
Nielsen’s point: Live TV in a seven-day measurement paradigm (plus DVR viewing) is still an essential advertiser metric, and that digital delivery in this time frame is still marginal, at best.
Of course, that’s not to say TV doesn’t have a “view-it-now” problem.
As shown below, prime-time TV viewing is down while tablet use is on the rise, which goes back to Hasker’s point that viewership of television programs hasn’t gone done. Instead, how consumers are watching TV program is rapidly evolving.
Asked by veteran financial analyst Anthony DiClemente, Managing Director of Nomura Instinet, at what point the TV industry will adopt total audience ratings, Nielsen President/Global Product Leadership Megan Clarken chimed in, as did Hasker as CEO Mitch Barns stood alongside the executive team.
The answer? Google and Facebook are already active partners on the transaction side and that there are no shortage of clients for total audience data.
But Google and Facebook aren’t TV networks, and unless the industry embraces what Nielsen has invested time and dollars in, it may not be the “third-party independent measurement tool” they believe in.