OPINION: More evidence that Nielsen is clueless

Over the long weekend I happened upon this article on DigitalTrends. with quite a proclamation. It stopped me in my tracks, and in fact the entire article was built around the sort of wink-wink, man-bites-dog kind of journalism where they do their best to try to prove to you that the things you believe just aren’t true. In this case:

As per Nielsen’s fourth-quarter 2016 Comparable Metrics Report, more than 92 percent of all viewing among American adults aged 18 years and older happens on a TV screen.

I’d love if that were true, but is it? There’s no other data but Nielsen’s, so you can’t refute it. Their methods seem sound, but their conclusions just don’t add up. Think about your own viewing habits. Are they 92% TV-centric? Mine aren’t either. I consume a lot of video on the PC screen and a lot on tablets. I’m a bit too old to be staring at a 5″ screen for hours, but my younger friends do, and so do my older friends’ kids. So how is it that Nielsen came up with a number that’s so incredibly comforting to traditional broadcasters and strikes the rest of us as being so unlikely? Well, that’s what they are paid to do, as I’ll discuss below, but first let’s get some other things out of the way.

Total minutes doesn’t mean “engaged minutes.”
Truth is, you probably do spend more time in the same room as the TV than you think. It’s probably on for noise or so you can get some real-time comfort-food viewing. But are you really watching, or are you in the same room as the TV while you play with your phone? I tend to think it’s the latter. When you think of the video you consume, you probably put the same amount of weight on a 1-minute facebook video as you do on a 30-minute sitcom. Short-form video is designed to demand your attention, while sitcoms are designed to transport you from guffaw to guffaw over a period of time. Nielsen doesn’t seem to care if you’re watching, they’re more than happy to count you as a watcher if you are in the same room.

The data that they’re showing the public includes seniors.
Seniors love TV. They seem to consume it constantly, as they have their whole lives. The data that’s being presented includes everyone over 18, which I’m sure artificially inflates those numbers. Keep in mind that it’s not me saying this, I’m quoting established marketing theory — seniors have very little value in the marketplace despite being a very large demographic. They are notoriously hard to sell to, because they tend to be much more educated consumers and less prone to jumping on the latest trends.

So perhaps TV viewing is thriving among that group, but if you look at TV shows that appeal to them, you’ll find that it’s a lot of drug company ads and insurance company ads. It’s not fair to characterize people over 55 that way, of course. Active seniors have a lot of interests and a lot of extra capital but no one seems to know how to capture their dollars.

It just doesn’t seem right.
There’s a lot of stuff in the world that doesn’t seem to make sense. Start with the idea that a ton of bricks weighs as much as a ton of feathers, if you want. But even though we shouldn’t filter all our data through the lens of common sense, there’s something about that 92% number that’s so far out of whack, so unbelievable, that it sets you back. In fact the entire focus of most articles about this Nielsen study is that “you’re not going to believe it but…”

Sometimes things are unbelievable because you shouldn’t believe them. Without the full report it’s impossible to know what statistical tricks were used, but I have to believe that some were. For the most part I like to deal in facts and I don’t like to go with hunches and so I’m not really comfortable dismissing this report as “unbelievable” just because I don’t believe it. But yet I do dismiss it, because…

Nielsen has been a drug pusher for the broadcast industry for decades.
OK that sounds harsh. Nielsen is a data-driven organization that hasn’t been accused of any misconduct and I’m sure they operate to the highest levels of integrity. But also keep in mind that the very reason they exist is to convince broadcasters that broadcasting is still relevant. They’ve consistently underestimated streaming and other forms of entertainment to try to keep broadcasting front and center.

Broadcasters are literally Nielsen’s only customers. They can try to track Netflix or Sling TV all they want but those services don’t need Nielsen. They can track their own viewers with a much higher degree of precision. DIRECTV doesn’t need Nielsen either; they have their own internal tracking. So the only money Nielsen gets comes from traditional broadcasters, whether locals like your ABC and NBC affiliate or national ones like AMC or USA.

And it’s pretty bad business to tell your customers that they’re on the road to irrelevance.

This past year, Nielsen has been unable to candy coat the numbers. If you look at individual shows, it’s pretty disturbing. The top rated scripted series of 2017, which happens to be on CBS, had only about 10% of the ratings of the top rated show of 1980, which also happened to be on CBS. How do you tell CBS, one of your biggest customers, that 90% of their audience is doing something else? You try to paint a rosy big picture. You say people are still watching TV, you say that they’re even still watching in the living room, despite everything you see and hear. You play up the overall size of the video-consuming market, which is larger than ever. And you hope that’s enough.

I’ve been watching Nielsen for years and this sort of palliative attitude is really common with them. They can’t fudge their numbers without getting caught, so they try to pretend the numbers don’t matter as much. They say, “people still love video, don’t worry” and “people love the half-hour format, and traditional broadcasters still do that best” and “advertising revenue is still strong when combined with retransmission revenue” and that cleverly helps them avoid saying “people are just doing something other than watching your commercials.”

Because it’s all about money.
If Nielsen’s message was “no one watches commercials — they DVR and skip commercials or watch online and see only a few of them” that would cause the entire industry to collapse. Broadcasters make TV shows because they can afford to do it, and their two big sources of revenue are commercials and retransmission fees. (Retransmission fees are those fees paid by pay-TV companies straight to broadcasters, so those channels can be carried on their systems.) Both commercials and retrans fees are based on ratings.

And ratings aren’t just in the toilet, they’re swirling through the sewer pipes.

So, Nielsen, in an attempt to make its only customers feel good, promotes studies like these in order to try to keep the broadcast economy going. Even if this story is true, it’s certainly not representative, and it doesn’t have anything to do with the way that the most desirable audience gets its video. This is what Nielsen has been doing for years and what they will continue to do until the whole thing collapses.

Which, depending on how much broadcasters believe this kind of study, could be sooner than later.