logo
Sign in or Register

Already a member?

Sign in

Or sign in with your account on:

Not a member yet?

Register
    

 


Are Nielsen Ratings Still Relevant?

  +Follow October 17, 2013 9:23AM
Share:
Tickers Mentioned:

As football season hits its stride and the World Series premieres, media analysts continue to cite one metric when judging the success (or failure) of these media events: the Nielsen Ratings. Developed in the 1950 to measure viewership of television, Nielsen ratings rely on information provided by the several thousand “Nielsen families” that fill out “paper diaries” about their viewing habits. The operators of the Nielsen ratings system extrapolate from the information supplied by the Nielsen families to estimate the number of nationwide viewers of any given program.

If the system seems imprecise or outdated, it is. But it’s unlikely to change anytime soon.

How Imprecise are Nielsen Ratings?

Think of it this way. There are 25,000 Nielsen families out of 114.5 million television-owning households, or .02183 percent. Nielsen also fails to account people watching in a group setting, which has normally skewed the Nielsen ratings of “television events” like the Super Bowl.

Contrast the Nielsen ratings with the internal numbers the widly popular streaming service Netflix Inc. (NFLX) logs about its customer’s viewing habits.  Netflix knows exactly how many people are watching, to the person. To be sure, a little chicanery concerning people sharing Netflix accounts skews the numbers slightly. But the sample size is exponentially more accurate than, say, .02183 percent.

Nielsen has been attempting to rectify this streaming shortfall, and in February announced they’d begin incorporating streaming viewership into their counters in September. It still doesn’t account for everything, however.

The DVR Issue

Cultural events like Breaking Bad or sporting events, most viewers aren’t terribly concerned with watching a show the exact moment it was released. This has further affected Nielsen’s ability to accurately gauge viewership of particular shows, as many viewers choose to DVR shows and watch them at their own leisure – maybe even the next week, after the numbers are already logged (Nielsen only counts up to seven days after an initial airing.) Watching shows long after the fact is becoming increasingly popular, especially among viewers 18-49.

That age range, known colloquially as “the demo,” is the area most coveted by ad buyers. A show that logs a high percentage of viewers in the demo can charge ad buyers substantially more. And ad buyers have a vested interest in paying less. Hence, Nielsen stays outdated.

It’s All About the Demo

The reason Nielsen remains entrenched in its archaic model is pretty simple: a more accurate model would show how many young people are still watching shows. It’s not hard to see which shows are getting plenty of attention. Look at total show mentions on Twitter, for instance. That number, while not pegging exactly how many people watched a show on airing, does provide an exact, specific number of how many people are discussing a show.

Twitter mentions are chock full with shows popular with young people that have conspicuously low Nielsen ratings.  Take the Twitter mentions of the week of Oct 7-13:

1. The Walking Dead (AMC, Sun.)
Tweets: 1,172,000
Audience: 7,491,200

2. Glee (Fox, Thurs.)
Tweets: 822,100
Audience: 5,167,500

3. American Horror Story: Coven (FX, Wed.)
Tweets: 435,600
Audience: 4,623,800

4. Catfish: TV Show (MTV, Tue.)
Tweets: 743,600
Audience: 3,544,300

5. The X-Factor (Fox, Wed.)
Tweets: 422,900
Audience: 2,393,300

Of those five shows, only one, the Walking Dead, cracked the Top 20 in Nielsen ratings that week.

According to Pew Research Center, as of May 2013 over two-thirds of US Twitter users are in the demo. While the number of mentions and subsequent audience reach don’t peg exactly the number of views, they give us a pretty good idea of the shows the demo cares about. And it’s markedly different than Nielsen.

Why Ignore the Demo?

Failing to account for streaming, Netflix, and other non-traditional viewing habits does one thing: under-represent the shows young people actually watch and care about. Certain shows that are popular with the demo but don’t score good Nielsen numbers – Community, Mad Men, Parks and Recreation to name a few – can still be advertised on cheaply. Ad buyers can simply tout low Nielsen numbers, even when they know the viewership is higher.

Of course, as the sea change towards online continues unabated, it might just be a moot point. But while traditional media still has control, Nielsen with all its flaws will probably continue to reign. Just don’t think it means what young people are really watching is being accurately counted.

 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


Liked What You Read? Join Equities.com and Connect With Your Favorite Financial Experts FOR FREE! Members of Equities.com gain access to our leading financial news and content, active social investment community, proprietary research tools including the 2014 Small-Cap Stars, E.V.A. reports and more.

Results for NFLX
Capital Market Labs
28 Mar 15 22:22:12
$PCLN vs. $EXPE vs. $NFLX vs. $BABA Compared Across 9 Critical Measures Chart: http://t.co/7AYO05Y7yK
ALittleLonger
28 Mar 15 22:17:44
RT @SteadyOptions_: $TSLA, $LNKD, $NFLX, $GOOG: Thank You, See You Next Cycle - https://t.co/1YyEzQcLTi - next cycle around the corner. We …
Capital Market Labs
28 Mar 15 22:06:38
Largest Retailing Revenue per Employee 1. $NFLX 2. $PCLN 3. $AMZN Full Chart: http://t.co/XuCXhNxSRD
Wincrease Team
28 Mar 15 21:53:58
Examples of our trades from the Mar 15 week for $AAPL $AMZN $FB $GOOGL $NFLX $TSLA. Join for free - http://t.co/6hQW776bNy
Wincrease Team
28 Mar 15 21:52:36
We went 12-0 for the Mar4 week trading $AAPL $AMZN $FB $GOOGL $NFLX $TSLA. Overall 156-22 for the year. - http://t.co/ovVuPPRw25
tradewithjoe
28 Mar 15 21:41:19
Testing calling out day trades next week on TWTR - $AAPL $FB $TSLA $IWM $SPY $GOOGL $AMZN $NFLX $TWTR - follow for trades.
Kevin
28 Mar 15 21:14:29
RT @SteadyOptions_: $TSLA, $LNKD, $NFLX, $GOOG: Thank You, See You Next Cycle - https://t.co/1YyEzQcLTi - next cycle around the corner. We …
LVK
28 Mar 15 21:13:31
RT @SteadyOptions_: $TSLA, $LNKD, $NFLX, $GOOG: Thank You, See You Next Cycle - https://t.co/1YyEzQcLTi - next cycle around the corner. We …
Joseph Mead
28 Mar 15 21:10:19
RT @Pharma_Trader: @VIZIO @carrascoaa @UltraFlix_4K_TV >>> $NTEK is the 4k version of $NFLX Good times coming.
James DiPlata
28 Mar 15 21:05:16
RT @stockhobbit: #Markets heading higher or lower? These #traders have some thoughts: http://t.co/ndv5bWOOj4 $NFLX $XOM $CVX http://t.co/w4…
Kim Klaiman
28 Mar 15 20:29:49
$TSLA, $LNKD, $NFLX, $GOOG: Thank You, See You Next Cycle - https://t.co/1YyEzQcLTi - next cycle around the corner. We are in $NFLX already.
Stock Hobbit
28 Mar 15 20:18:08
#Markets heading higher or lower? These #traders have some thoughts: http://t.co/ndv5bWOOj4 $NFLX $XOM $CVX http://t.co/w4oM4ydlvA
Ophir Gottlieb
28 Mar 15 20:04:49
$AMZN vs. $JD vs. $PCLN vs. $NFLX Compared Across 9 Critical Measures Chart: http://t.co/hlbXe4yzgm
things for free
28 Mar 15 19:46:52
RT ☐ Free guide to understanding risk graphs http://t.co/F5NKfecAYw $NFLX $PCLN $TSLA http://t.co/F5NKfecAYw
Carolyn B Miciano
28 Mar 15 19:31:31
Free guide to understanding risk graphs http://t.co/e9UDURwuRx $NFLX $PCLN $TSLA
Patriot Trading
28 Mar 15 19:27:54
@VIZIO @carrascoaa @UltraFlix_4K_TV >>> $NTEK is the 4k version of $NFLX Good times coming.
Carolyn B Miciano
28 Mar 15 19:26:20
All about MACD indicator Free course http://t.co/Qa9da55QQI $NFLX $PCLN $TSLA
Capital Market Labs
28 Mar 15 19:02:14
$NFLX vs. $BABA vs. $PCLN vs. $AMZN Compared Across 9 Critical Measures Chart: http://t.co/cKPYulCk9I
James DiPlata
28 Mar 15 18:59:52
RT @stocknugget: Great FREE #tutorial here for #traders http://t.co/LEJZ0NzJO6 $NFLX $BAC $AMZN $MSFT $AAPL $GOOG $GOOGL $FEYE http://t.co/…
Capital Market Labs
28 Mar 15 18:13:44
$NFLX Revenue is Increasing. Chart: http://t.co/9Q7tHkV8MZ https://t.co/QN3BwQxDXx
Bradley
28 Mar 15 17:51:12
Great FREE #tutorial here for #traders http://t.co/LEJZ0NzJO6 $NFLX $BAC $AMZN $MSFT $AAPL $GOOG $GOOGL $FEYE http://t.co/HQM58XXNmG
James DiPlata
28 Mar 15 17:50:21
RT @KhooForex: RT Eyang Sukur KhooForex : RT Gavin Martinsson GEQSense : New Post: Twitter and Trading - http://t.co/HBKFjKwOJs  <- $aapl …
Carolyn B Miciano
28 Mar 15 17:47:40
Beginners guide to financial markets http://t.co/Bh1HGAF5bK $NFLX $PCLN $LNKD
paul bratby
28 Mar 15 17:45:23
2 #Swingtrades on $NFLX in 2 months - 2 wins! Trade Diaries HERE http://t.co/rEDodCGh33 & HERE http://t.co/VYcQ8skCwH http://t.co/47aoZ9G9ee
Capital Market Labs
28 Mar 15 17:44:09
$NFLX Earnings are Increasing. Chart: http://t.co/rT1jJSH6CK https://t.co/mcOVpAzWcU
Garage Traders
28 Mar 15 17:30:16
RT @tradewithjoe: How Joe trades on Friday - $QQQ $DIA $IWM $AAL $TWTR $GOOGL $AAPL $NFLX $LNKD $FB $SPY $PCLN - http://t.co/moCrppUtwx htt…
tradewithjoe
28 Mar 15 17:11:00
How Joe trades on Friday - $QQQ $DIA $IWM $AAL $TWTR $GOOGL $AAPL $NFLX $LNKD $FB $SPY $PCLN - http://t.co/moCrppUtwx http://t.co/AJiG7OXmQf
Carolyn B Miciano
28 Mar 15 16:55:06
Classic earnings trade with Priceline http://t.co/rrdf7ATEbF $NFLX $PCLN $LNKD
Ophir Gottlieb
28 Mar 15 16:50:13
Retailing Risk per Options: - 1 $NFLX 2 $JD 3 $AMZN 4 $PCLN Scatter plot --> http://t.co/M3xvA3EU2p
Eyang Sukur
28 Mar 15 16:47:37
RT Eyang Sukur KhooForex : RT Gavin Martinsson GEQSense : New Post: Twitter and Trading - http://t.co/HBKFjKwOJs  <- $aapl $nflx $tsla $s…
James DiPlata
28 Mar 15 16:47:07
RT @KhooForex: RT Gavin Martinsson GEQSense : New Post: Twitter and Trading - http://t.co/HBKFjKwOJs  <- $aapl $nflx $tsla $scty #forex #f…
Dan
28 Mar 15 16:46:14
$NFLX OI for maturity 03/27/2015. 417.50 Highest put. 430.00 Highest call. http://t.co/6FIsVAkns2
Dan
28 Mar 15 16:30:29
$NFLX Max Pain is 430.00 for maturity 03/27/2015. Price = 414.77. http://t.co/3WvMmroBYd
FinSentS NASDAQ
28 Mar 15 16:26:17
$NFLX:US Netflix : QUICK QUIZ #NETFLIX INC http://t.co/preuEiCoX4 #NASDAQ
paul bratby
28 Mar 15 16:25:09
2 #Swingtrades on $NFLX on 2 time frames in 2 months with 2 wins! Trade Diaries HERE http://t.co/FBLLTnn4wx & HERE http://t.co/x31TsNGwQB
Robert Reale
28 Mar 15 16:12:44
RT @acestock: once a skeptical like many on $tsla, @smartertrader once told me buy $nflx at $57!,I said hell no,he called $150,than $200&hi…
FinSentS SP500
28 Mar 15 16:06:16
$NFLX:US Netflix : QUICK QUIZ #NETFLIX INC http://t.co/398EOkL2FN #SP500
sam
28 Mar 15 16:03:16
RT @acestock: once a skeptical like many on $tsla, @smartertrader once told me buy $nflx at $57!,I said hell no,he called $150,than $200&hi…
Eyang Sukur
28 Mar 15 15:46:01
RT Gavin Martinsson GEQSense : New Post: Twitter and Trading - http://t.co/HBKFjKwOJs  <- $aapl $nflx $tsla $scty #forex #futures #option…
James DiPlata
28 Mar 15 15:42:38
RT @GEQSense: New Post: Twitter and Trading - http://t.co/08sBAvvY7n <- $aapl $nflx $tsla $scty #forex #futures #options $googl $baba $wll …
Carolyn B Miciano
28 Mar 15 15:40:37
Use probability to create monthly income strategies http://t.co/AFe5ZqZ4He $NFLX $PCLN $LNKD
Gavin Martinsson
28 Mar 15 15:37:32
New Post: Twitter and Trading - http://t.co/08sBAvvY7n <- $aapl $nflx $tsla $scty #forex #futures #options $googl $baba $wll $acad
Stock Hobbit
28 Mar 15 15:14:10
#Markets heading higher or lower? These #traders have some thoughts: http://t.co/ndv5bWOOj4 $NFLX $XOM $CVX http://t.co/qgky0t59NL
4-traders.com
28 Mar 15 15:11:41
#Netflix : TV quiz http://t.co/M7XTkRwvtk $NFLX
Capital Market Labs
28 Mar 15 14:54:53
$NFLX Assets are Growing. Chart: http://t.co/KMtCrbrydP https://t.co/jrG5B7BoI6
Syed Ali
28 Mar 15 14:37:51
RT @Weeklyoptions: " @Administrator : $NFLX STATS ISSUED:3 WIN:2 MISS:1http://www.weeklyoptionplays.com/forums/?forum=54&topic=1084&current…
OptionsGenius
28 Mar 15 14:36:37
" @Administrator : $NFLX STATS ISSUED:3 WIN:2 MISS:1http://www.weeklyoptionplays.com/forums/?forum=54&topic=1084&current_page=1 "
Kevin McFall
28 Mar 15 14:15:45
No “@TedatACA: Will Apple TV and Dish's Sling TV Kill Netflix Inc.? $NFLX http://t.co/gAKgUbM1YF | Motley Fool $AAPL”
David
28 Mar 15 14:10:06
@TMobileBullies @JohnLegere #stevejobs like CEOs $UA $TSLA $RH $CRM $SBUX $GPRO $BRK-A $FB $HAIN $CMG $NFLX $JPM $AMZN $TMUS $PPG $DPZ $HON
Capital Market Labs
28 Mar 15 14:02:53
Largest Retailing Revenue per Employee 1. $NFLX 2. $PCLN 3. $AMZN Full Chart: http://t.co/w9p07plIPp https://t.co/x98qiYd3dx
				
				
  +Follow October 17, 2013 9:23AM
Share:

Comments

 

blog comments powered by Disqus

About us

Equities.com is the most advanced interactive online social ecosystem for the financial industry, serving as a resource center and next-generation communication platform that connects self-directed investors with public issuers, market experts, and professional service providers and vendors. Registered members can leverage our exclusive proprietary research tools such as the Small-Cap Stars, which outperformed 90% of all small-cap mutual funds, and robust do-it-yourself E.V.A. research reports. The Equities.com Issuer Dashboard is the ideal tool to communicate and manage investor awareness campaigns to the investment community, as well as to access valuable resources to help your company grow.

Market Data powered by QuoteMedia.
Copyright © QuoteMedia. Data delayed 15 minutes unless otherwise indicated. Terms of Use.