Nielsen Backs Off Reporting Data On Cord Cutters Because The Cable Industry Prefers Fantasyland

from the Plato's-cave dept

For many years we’ve discussed how the cable industry is in stark denial about cord cutting, insisting at different points that the cord cutter was a mythological beast akin to yeti or unicorn, despite very obvious stats showing they’re a small but growing and very important statistical reality. When the industry wasn’t busy insisting that cord cutters didn’t exist, they were busy trying to argue that they were an irrelevant niche market of uneducated, middle-aged dolts (not that there’s anything wrong with that) living in mom’s basement, even though the data shows that cord cutters tend to be young and highly educated.

As such, it has been fun watching the legacy TV industry (and those that exist and profit comfortably within it) perform 180s when confronted with data that has become less and less “negotiable.” For example, one of cord cutter’s biggest opponents was former Sanford Bernstein analyst Craig Moffett, who spent years insisting to any media outlet who would listen that cord cutters weren’t real, only to recently move to his own firm, where he now readily admits cord cutting is an important trend (you’re to ignore the fact he was not just wrong, but aggressively wrong, for many years).

Also amusing to watch has been TV ratings firm Neilsen, who has an obvious vested interest in keeping TV ecosystem executives happily believing whatever they’d like to believe about the current TV ad market. Nielsen over the years has gone out of their way to proudly proclaim cord cutting was “purely fiction,” yet despite this certainty, the firm only about a year ago announced they would finally begin the process of figuring out how to track viewership on alternative devices (consoles, iPads, smartphones) and services like Netflix and Hulu. Around the same time, Nielsen began manipulating their definitions, calling people who don’t watch TV on a TV “zero TV households” — just so they didn’t have to use the term “cord cutter” and admit what they’d spent years denying.

Fast forward to this week with the news that Nielsen is bowing to broadcaster pressure to delay publicizing data the cable industry may not like. After fielding complaints from NAB, Nielsen is withholding broadband-only household data from the firm’s local TV ratings service “for the time being.” Their explanation:

“In early 2013, the decision to include broadband-only homes in Nielsen’s television universe estimate was made to measure the media behavior of the average U.S. viewer in this fast-changing and evolving technological landscape,” Nielsen Senior Vice President-Insights and Analysis Pat McDonough said in a statement. “This change was made with specific and strategic measurement benchmarks in place as a way to study how this small segment of the vast viewing audience might affect the larger sample. “Based on a thorough evaluation of the viewing patterns in broadband-only homes and industry feedback on the need to maintain stable measurement in local television,” she continued, “we have decided to exclude broadband-only TV homes from local TV measurement and ratings for the time being.”

That’s long-winded code for: “the cable industry wants to remain in fantasyland and our data upset them, so because they pay us we’re allowing them to remain willfully oblivious until they’re better able to acknowledge reality.” There’s been a lot of pressure for Nielsen to modernize their viewing analytics, and pretty clearly those folks will be waiting a little longer. Kind of amusingly, you’d be hard-pressed to find TV ratings operations or analysts that even try to include (genuine) piracy statistics, lest that data further force the cable and broadcast industry to actually pay attention to the real world and changing consumer trends.

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Companies: neilsen

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Comments on “Nielsen Backs Off Reporting Data On Cord Cutters Because The Cable Industry Prefers Fantasyland”

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52 Comments
Violynne (profile) says:

2000:
TV viewers: 95% per 1000.
Broadband users: they don’t exist!
No-TV households: 5% per 1000.
Number measured: 1,500,000

2005:
TV Viewers: 95% per 1000.
Broadband users: they don’t exist!
No-TV households: 5% per 1000.
Number measured: 1,000,000

2013:
TV Viewers: 95% per 1000.
Broadband users: uh oh!
No-TV households: 5% per 1000.
Number measured: 500,000

It’s easy to keep an artificial number up when the user base has decreased.

When everyone’s on broadband, maybe then they’ll face the truth.

ECA (profile) says:

Re: Re:

read THE FINAL NUMBER..THE NUMBER MEASURED..

NOW for some fun.

1. at leat 10% of USA dont watch tv..
2. out of the TOTAL number of persons in the USA, how many can afford $50+ per month. lets cut another 30% off the list.
3. NOW those 60% see that SOMEONE uses Broadcast TV..and they see that its CHEAPER..(maybe $100 to setup, 1 time) AND they can SAVE money. another 10+%
4. Internet?? and knowing HOW to use it..Take another 10% off. (maybe 20%) being able to watch MOSt of what you want, WHEN you want..we still aint gotten to RICH people who can afford a DVR/PVR..
5. THOSe USERs that find a hidden alternative on the net to watch WHAT they want..Another 5%..
6. Searching the net, and finding a wiki on FTA…and seeing that many nations install SATELLITES, and give free service to watch TV, if you got a box($100-300). knowing is 1/2 the battle..
7. finding out that ESPN is a required channel, and it costs MORE then any other channel. and you dont watch sports.(but everyone pays for it)
8. looking at your bill, and seeing that you watch about 20 channels..out of 200 you are paying for.
9. realizing the channels you WANT, cost more money..That $50 for 200 isnt enough..
10. realizing that CABLE/SAT wont remove the 180 channels you DONT want in exchange for the ONES YOU WANT.. Priceless..

Anonymous Coward says:

Re: Re: Re:

Yeah they partnered with Nikon to produce some early models but those were mainly aimed at the high end professional market. I think their problem was that they had never fully entered the camera market in a big way even before digital photography started to appear and so they were way behind on the R&D and manufacturing process with getting into the game for themselves once film and processing sales started to decline.

Anonymous Coward says:

Re: Re: Re: Re:

And as most of the early digital cameras were DSLRS (which were essentially modified versions of the film SLRs fitted with a sensor, processor, and storage media where the film mechanisms were) the people who bought the cameras typically already had a whole slew of compatible lenses from their film cameras that fit their new DSLR. For Kodak to compete directly with them on this they would have had to convince these people to dump all their old equipment in favor of embracing a new Kodak line which didn’t exist yet since they never jumped headlong into that market.

zip says:

Re: Re: Re:2 Re:

Kodak actually INVENTED the digital camera way back in 1975 – but (possibly) seeing as its very existence threatened Kodak’s primary business operation – photographic film (which Kodak enjoyed a virtual monopoly) – the company decided against developing digital camera technology.

http://www.techradar.com/us/news/cameras/photography-video-capture/how-kodak-invented-the-digital-camera-in-1975-364822

JEDIDIAH says:

Re: Re: It's the dawn of a new day.

They were early to the party but they were unwilling to adapt to the new reality. They were a company based on the idea that you consume materials every time you take a photograph. They weren’t about the cameras, they were about all of the associated consumables and processing.

Digital wiped all that out.

Even if Kodak were able to adapt to the new approach, they still would have seen most of their business evaporate. It simply became obsolete.

Anonymous Coward says:

It’s likely the TV networks’ weak attempt at maintaining the illusion towards their advertising clients as long as possible, with Nielsen-based media planning and air-time valuation.

They know pretty well what’s coming at them and that they are unable to take the hand again, so let’s smoke-screen those legacy clients for as long as it still works…

Anonymous Coward says:

Re: Re:

That, but the second part of the argument is on local station ratings. That segment is likely expensive to measure, but if the TV networks want to keep commercial prizes high in these markets, statistics are a must.

Nielsen probably want to go into the online market, but that is not where the people paying their bills focus. Btw. local TV still seem like an awkward place to start. Yes, local has a lower market and will therefore be less valuable to monetize online, but if that is their reasoning online should still be prepared for the non-local measures. It seems dangerous for them to let others collect data online. Then again, their statistical knowledge is probably less valuable when several trackers are able to gather and treat so much more and better data than what they work with normally.

Christopher Smith (profile) says:

Even OTA TV isn't TV

I was recently picked to do Nielsen ratings, and I figured I’d give it a try as entertainment. When they called me to do the screening survey, the representative specifically told me that a TV tuner card, watching OTA broadcast TV, doesn’t count as television if I use a projector or a computer monitor as output, though if I used a monitor marketed as a TV with HDMI input, it would count. I’m amazed advertisers are still willing to accept prices based on these studies.

Anonymous Coward says:

Re: Even OTA TV isn't TV

“I’m amazed advertisers are still willing to accept prices based on these studies.”

You are looking at it the wrong way. They don’t want companies like Nielsen to provide them information useful to determining if their programming is good or whether adjustments need to be made or not. That is not what they are paying Nielsen for. They are paying Nielsen to provide them with statistics that they can use to justify the prices that they charge the advertisers. Whether those statistics are accurate or not or are obtained with severely flawed methodology isn’t important to them. They just want a set of figures they can point to and say “See? Here are the figures in black and white. Now pay me the money.” Nielsen’s job is to provide them with the figures they want to see, not what is useful. Nielsen is going to give them what they are paying for. And if they can’t, they will adjust the methodology until they can.

Anonymous Coward says:

Re: Re: Even OTA TV isn't TV

Actually I misread your sentence. I thought you were saying that you were amazed that the networks were still willing to accept the prices that Nielsen charges them for the studies.

As for the advertisers. They don’t know the methodology being used and they have an advertising budget to spend somewhere so they must figure flawed statistics are better than no statistics. And since they all play the same game, where else are the advertisers going to spend their budget?

Sheogorath (profile) says:

Re: Even OTA TV isn't TV

When [Nielsen] called me to do the screening survey, the representative specifically told me that a TV tuner card, watching OTA broadcast TV, doesn’t count as television if I use a projector or a computer monitor as output […]
Seriously? I think I’ll inform TV Licensing of that the next time I have to pay the TV tax.

Anonymous Coward says:

Cable Companies aren't denying anything

They control the market so much that they don’t care about cable cutters. Know why? Because they control the availability. I *want* to be a cord cutter. But I can’t.

Comcast only offers 3 internet-only packages. 6mbps (in which case, why not just stay with DSL?!?) for $30/month. 100 Mpbs for $130/month and something even insanely larger (and more expensive).

The only reasonably-priced internet options they offer (20 & 50 Mbps) are force-bundled with television. You can’t get them *without* TV.

fogbugzd (profile) says:

Re: Cable Companies aren't denying anything

Hence the desire of the big cable companies to merge. They have to do something to make sure they can maintain their monopoly on broadband. They don’t want one of the other players to go all “T-Mobile” on them and disrupt the market or demonstrate that there are alternative business models besides forced bundles.

John Fenderson (profile) says:

Re: Re: Re: Cable Companies aren't denying anything

You do? Comcast is ripping me off! The best deal I could get from them involved bundling basic cable (although I’ve never even hooked the cable box up) and costs more than $65/mo for a slower link.

I absolutely hate Comcast. Hate. Hate. Hate. But I have no other option. They are literally the only source of broadband in my area (DSL doesn’t reach where I live even though I’m in a major urban area.)

The millisecond I have another option, I’ll take it — which is why deals like this make me angry. It’s taking an already existing Comcast monopoly and entrenching it even deeper.

Kevarsky says:

Re: Cable Companies aren't denying anything

Cable cutters are not hurting the cable companies, because people who cut the cable need to buy high speed internet. Which incidentally is controlled by the same companies. And they pretty much can put a stop to cable cutting anytime they wish. They just need to implement data caps. Most markets don’t have ISP competition so they can do whatever they want.

Franklin G Ryzzo (profile) says:

Re: Re:

I’ve never paid for cable. Between the internet and OVA broadcasting, I’ve never seen the point. If I can’t stream it, download it, or watch it OVA, then I’ve come to the conclusion I don’t really need it. When I find something I like I’ll get the DVD or Bluray. I guess never having cable as a kid made it easy for me. It always makes me laugh when I go to a friend’s house, flip through 400 channels and still can’t find anything worth watching, yet if I’m bored I can almost always find something at home OVA to settle on.

DV Henkel-Wallace (profile) says:

Craig Moffett

former Sanford Bernstein analyst Craig Moffett, who spent years insisting […]hat cord cutters weren’t real, only to recently move to his own firm, where he now readily admits cord cutting is an important trend (you’re to ignore the fact he was not just wrong, but aggressively wrong, for many years).

It seems likely that you’re to embrace it, not ignore it. Moffett appears to be saying, “I am the standard analyst who will shill for whoever pays my bill. I am signaling that the cablecos are not paying me but am available to the highest bidder.”

It’s possible he’s saying “now I’m a free agent and will speak my mind” but it will take a long time for him to overcome the old reputation, if he could even pull that off at all.

Sadly this is how most analysts, in most industries, seem to behave. There are some notable exceptions (Ben Bajarin in the PC sector comes to mind) but they are quite few and far between!

Say, Mike: this makes me realize that Techdirt deserves to win some awards. Perhaps you could enter the JD Powers contest for “Best tech blog with an earth-related term in its title.” Or, come to think of it, “Most effective farm machinery”. I’m sure with payment of a small entry fee either, or both, would be forthcoming.

PS: the part about Powers sounds like a joke, though sadly it isn’t. The part about TD deserving an award is not a joke.

Anonymous Coward says:

Re: Craig Moffett

“Perhaps you could enter the JD Powers contest for “Best tech blog with an earth-related term in its title.” Or, come to think of it, “Most effective farm machinery”. I’m sure with payment of a small entry fee either, or both, would be forthcoming.”

That sounds like the sort of stunt Stephen Colbert would pull.

David says:

Young and highly educated?

I’m probably old but highly educated, but I cut the cord. It was my wife that corded up the house (for kids programming like Nick and Disney). Now she realizes there’s no advantage, and it’s too costly. The kids read, play on-line games (Minecraft is popular) or watch content on places like YouTube (even recent episodes of shows they like). Netflix and Amazon Prime (much cheaper than cable/sat) allow us to watch what/when we want, and OTA takes care of lots of current programming/weather/sports. In fact, we actually like a lot of the alternative local broadcast stations (like COZI) for some of the older TV shows we haven’t seen in a long time.

Netflix knows the future, and that’s why they did House of Cards like they did. I believe fixed-scheduled programming is going to be the niche market in the future.

JEDIDIAH says:

Re: Young and highly educated?

Another avenue to consider is DVD. 10 years ago, I knew younger guys that would wait for some show to get onto DVD and then binge watch the whole thing at once.

My own cord cutting started off in a similar manner with the practice of buying DVDs in lieu of subscribing to HBO.

The world has changed in all kinds of ways.

John85851 (profile) says:

It's time to stop playing these games

First, they’re obviously playing the statistics game. Like the first poster points out, Neilsen can continue to say “95%” of its audience still watches TV, even though they’ll define their audience in small print in a footnote. Sure, 95% over the years still looks good, but it’s bad when the sample population is falling every year.

And why are the Neilsen ratings still used to determine network advertising rates? This is what gives us “sweeps week” where networks pull tricks to get more viewers (such as celebrity appearances, etc). Yet everyone knows that the sweeps week ratings won’t happen every week.

Anonymous Coward says:

I’m good with what they don’t believe exists. Apparently I’m in unicorn land. Being that I am a senior, cut the cord at least 12 years ago. Never bought a new tv set up to handle digital nor a black box. I just don’t care about tv. Those commercials they are so proud of making 1/3 of the entire broadcast time of a show are way, way, too much for me.

I don’t need 400 channels of the same bs, 20 channels running the same reruns on slightly different hourly schedules, and see no benefit worth paying the outrageous prices they want.

ESPN can keep their sports and the high prices they keep jacking up. I long ago gave up any interest in them. This is a zero tv household as the article likes to state it. It will stay that way at no additional cost.

Mac says:

As a cordcutter, I was a Nielsen user

About 6 months ago, I was called to be a Nielsen user. I spoke with them about my TV habits, admitted I used Netflix and Amazon to watch my shows. They still sent me a packet to document what I watched. So at 7:30 pm, I’d put down watching Suits on channel “Amazon”, and so on. They collected it at the end, I wonder how they interpreted my data? Especially my watching of channel “HBOGo” without cable service.

zip says:

Maybe we could learn a few things from the British, who know down to a household exactly how many are TV watchers.

Though it’s interesting that many Brits who don’t have a television still voluntarily pay the annual TV tax just to keep the government authorities from harassing them under the assumption that everyone who claims not to watch TV is both a liar and a tax cheat.

ECA (profile) says:

Failed Corp experience on NET.

Any one know the back story on HULU??

Corps using the net to see if it could work?
Corps changing the format until its almost UN-usable?

Corps trying to take back data and Shows, to their own sites, and failing, because BANDWIDTH an STORAGE means alot..

ending with a company that has NO real control or BACKBONE, to tell the corps what it needs/wants to become favorable over PIRATE sites…

Urgelt (profile) says:

Proud Cord Cutter Here

I don’t own a TV. Well, I do, but it doesn’t work – it’s an old analog set that doesn’t receive digital signals. I have cable internet but not cable TV.

The only TV I see is over the internet in small chunks: sometimes Comedy Central’s The Daily Show, occasionally a video slice on HuffPost or MSNBC or whatever. It doesn’t add up to much.

I’m perfectly happy to have the TV ecosystem ignore me. I don’t really care if advertisers think they are getting more audiences than they are.

In the years since I stopped watching television – starting in 2003, it was – I have learned to think again. (Doesn’t mean I’m always right. But I am thinking.)

Television is hypnotic. It does our thinking for us when we plug into it, which is why advertising commands the big bucks. Ads literally program our attitudes and proclivities. TV is the most powerful propaganda medium ever invented – and it’s frighteningly effective.

People who can’t think, can’t challenge the status quo. Our inability to challenge the status quo is why we are losing our rights under our own Constitution. If you ask me, it’d be a big step in a positive direction if all TV-watchers cut their cords. Some of them might wake up.

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