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If the system seems imprecise or outdated, it is.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.


Liked What You Read? Join Equities.com as a contributor and get eyeballs on your content FOR FREE!

Results for NFLX
Johnny Trades
18 Sep 14 09:51:33
$NFLX Cleared my R level trimmed my Oct calls +.80 just scalping.
Illmatic
18 Sep 14 09:46:48
$NFLX $461.34 resistance if it can break that, fireworks
lookn4wins
18 Sep 14 09:45:51
$PRAN TA $PRAN Most recent stock chart and technical analysis. $CLF $SLW $NFLX $ACT $NETE $TBT http://stockcha http://t.co/Kx2dpuz3MO
elmasastuto
18 Sep 14 09:44:49
RT @carrascoaa: $NTEK's #4K channel #Ultraflix mentioned in Forbes articles, and references deal with Sony. More exposure! http://t.co/CUCm…
lookn4wins
18 Sep 14 09:43:05
$AAPL Daily Chart $AAPL Most recent stock chart and technical analysis. $YY $C $KEY $NFLX $ERX $FB http://stoc http://t.co/MVDO1Uw3Ys
Futures Day Trader
18 Sep 14 09:42:53
Get Your 7-day Free Trial $ES_F Live Trading Room Visit http://t.co/CC2I4kuzwV $SPY $FB $NQ_F $SPX $YM_F $TSLA $NFLX $TWT $QQQ $DJI
Options Network
18 Sep 14 09:40:35
$NFLX $GMCR are you having fun? We are #LOVING #ROCKING http://t.co/N9BYN4AgoN
Keith Jenkins
18 Sep 14 09:40:11
Welp, I was dead wrong on $NFLX today. Not afraid to admit my mistakes. That damn thing is on a tear!
 Matt
18 Sep 14 09:40:09
Rip for daddy $NFLX
aznboi27
18 Sep 14 09:38:03
$$$ $WYNN $NFLX
  The  TURK
18 Sep 14 09:37:20
RT @CPtte: In a few $NFLX 465 weekly calls for 62c
 Matt
18 Sep 14 09:37:12
@lalaruza74 $NFLX 465, its really quite thin up in here here
Whitty
18 Sep 14 09:37:10
$NFLX running, $TSLA perched for a run, $GS on fire. $BABA tomorrow. Everything so positive
Becky Hiu
18 Sep 14 09:37:05
YEEE. $NFLX :( HOD.
Xristofo
18 Sep 14 09:36:06
In a few $NFLX 465 weekly calls for 62c
MrLomez
18 Sep 14 09:32:17
So much for those $NFLX puts. Note to self: when everyone on Stocktwits is calling for the same move, GTFO.
Eddie Kash
18 Sep 14 09:32:10
This Bear Flag on $NFLX looks like it could get violent! Break below 452 and we see low 400's.. Fast!
Sleuth Stock
18 Sep 14 09:31:50
Analysis about dangers of $baba from @JeffCNYC is good, but ultimately shorting $amzn $nflx safer than $yhoo $baba..don't fight M&A bankers
Amy Wood WSPA
18 Sep 14 09:30:37
RT @kaylatausche: TV stuck in the '70s, as @tim_cook says? Accdg to @KevinSpacey, no, "but there might be some executives that are stuck in…
Justin Pulitzer
18 Sep 14 09:29:25
“@airvipmrohde: @JustinPulitzer $NFLX breathing life....I see $462.47 next hurdle to clear”<~Long Vs. LOD is ok.
Emini Scalping
18 Sep 14 09:28:53
Get Your 7-day Free Trial $ES_F Live Trading Room Visit http://t.co/TM6V1DMIKL $SPY $FB $NQ_F $SPX $YM_F $TSLA $NFLX $TWT $QQQ $DJI
Evan Medeiros
18 Sep 14 09:27:15
covered up my $NFLX short as it cleared back above 458 , small loss overall. ill keep it on watch if it breaks back below 452
Shan Shan Xie
18 Sep 14 09:27:13
$NFLX Same short pattern as YY's. It doesn't work if it consolidates above the 50dma. Will reshort below 447 https://t.co/oQUn4lTBoM
Michael Rohde
18 Sep 14 09:26:11
@JustinPulitzer $NFLX breathing life....I see $462.47 next hurdle to clear
Quang Doan
18 Sep 14 09:26:03
Are we crashing yet? No way for tomorrow since #CenralBankers are the buyers. $ES_F $SPY $AAPL $TSLA $NFLX $AMZN. Never & ever crash on Fri
Options Network
18 Sep 14 09:25:43
$NFLX $GMCR next #BEAST http://t.co/w2rVUJ4Zi3
Winborn Traders
18 Sep 14 09:24:29
Get Your 7-day Free Trial $ES_F Live Trading Room Visit http://t.co/lIREoJPv8j $SPY $FB $NQ_F $SPX $YM_F $TSLA $NFLX $TWT $QQQ $DJI
Carolyn B Miciano
18 Sep 14 09:22:51
Study of Delta the king of Option greeks http://t.co/RHx80Rp6au $NFLX $PCLN $TSLA
Options Network
18 Sep 14 09:20:50
$NFLX NEW HOD http://t.co/XBc8Q0ZYMj
Johnny Trades
18 Sep 14 09:20:36
@RedlerAllAccess $Nflx has been setting higher Low's almost testing 460 level with next R @ 462
Options Network
18 Sep 14 09:19:39
$NFLX 460s and can try 465s next http://t.co/Bi1lCEjbee
chartguy89
18 Sep 14 09:17:49
GOOG Stock Chart $GOOG $NFLX $JRJC $JNUG http://t.co/DtjFyoiPhN http://t.co/TFeOhJR1ba
Investors Hangout
18 Sep 14 09:17:13
Emylers: $NFLX Up to date company activities and other http://t.co/8zN6sulM9K
Investors Hangout
18 Sep 14 09:17:13
Emylers: $NFLX Up to date company activities and other http://t.co/OsGc8Npkkl
Options Network
18 Sep 14 09:16:50
$NFLX NEW HOD http://t.co/JaCVTKhEj0
Emylers
18 Sep 14 09:16:41
$NFLX Up to date company activities and other important information about $NFLX http://t.co/Dmln5CstWm
 Matt
18 Sep 14 09:15:48
$NFLX 458 retest,, slingshot set, go!
androsForm
18 Sep 14 09:14:10
$NFLX #bto SEP4 14 (8) $460 Cs @ 4.8 | Looks poised for a big move here http://t.co/2nAx57F24K
Squawk on the Street
18 Sep 14 09:13:46
RT @kaylatausche: TV stuck in the '70s, as @tim_cook says? Accdg to @KevinSpacey, no, "but there might be some executives that are stuck in…
Squawk Alley
18 Sep 14 09:13:46
RT @kaylatausche: TV stuck in the '70s, as @tim_cook says? Accdg to @KevinSpacey, no, "but there might be some executives that are stuck in…
Carolyn B Miciano
18 Sep 14 09:11:58
Detailed study of Options market elements http://t.co/zcwYh2PI6m $NFLX $PCLN $LNKD
Jeff Farley
18 Sep 14 09:11:38
Long $NFLX Oct 3rd $465 calls $4.75 for Mon Tues to see if get numbers of initial sign ups in Europe.
Winborn Traders
18 Sep 14 09:10:09
Get Your 7-day Free Trial $ES_F Live Trading Room Visit http://t.co/xnrgpKu9l0 $SPY $FB $NQ_F $SPX $YM_F $TSLA $NFLX $TWT $QQQ $DJI
Winborn Traders
18 Sep 14 09:09:03
Get Your 7-day Free Trial $ES_F Live Trading Room Visit http://t.co/auQ6VnwERN $SPY $FB $NQ_F $SPX $YM_F $TSLA $NFLX $TWT $QQQ $DJI
Joshua Payne
18 Sep 14 09:08:13
RT @carrascoaa: $NTEK's #4K channel #Ultraflix mentioned in Forbes articles, and references deal with Sony. More exposure! http://t.co/CUCm…
Joseph Mead
18 Sep 14 09:07:35
RT @carrascoaa: $NTEK's #4K channel #Ultraflix mentioned in Forbes articles, and references deal with Sony. More exposure! http://t.co/CUCm…
NFLX Quote and News
18 Sep 14 09:02:56
$NFLX stock quote, 11:47am: 458.24 +3.71 (+0.82%).
BUZZ Just-In
18 Sep 14 09:02:12
These assets are seeing a jump in tweets $NFLX $WFM $Yahoo $DD $GE http://t.co/YQCyffWFio
DR JAMES CABOT
18 Sep 14 08:59:32
RT @kaylatausche: TV stuck in the '70s, as @tim_cook says? Accdg to @KevinSpacey, no, "but there might be some executives that are stuck in…
carrascoaa
18 Sep 14 08:58:56
$NTEK's #4K channel #Ultraflix mentioned in Forbes articles, and references deal with Sony. More exposure! http://t.co/CUCmex0fR5 $nflx $fb
				
				
  +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.