Nielsen will soon expand its TV ratings system to include online viewers, it told clients yesterday. Armed with its broadened definition of what constitutes a "TV household", Nielsen hopes to more accurately reflect modern day media consumption and advancements in technology -- an important undertaking if Nielsen wants to subsume the growing number of people cutting the cord.
The company's modification now defines a "TV household" as a home in which exists "at least one operable TV/monitor with the ability to deliver video via traditional means of antennae, cable or satellite receiver and/or with broadband connection." Notably, TVs and computer monitors are now interchangeable, just as antennas, boxes and broadband are all granted equivalence.
Nielsen Company's work with ratings and market analysis dates all the way back to the 1920s. The firm began its enterprise by collecting statistics for radio shows, subsequently making the transition to television programming in the 1950s during a time when TVs were widely adopted. Now, the company hopes to plunge head first into the latest way consume media: broadband.
While Nielsen's embrace of cord-cutters can only be a plus for the firm and its clients, its approach does exhibit one caveat: its online results may lack a degree of specificity. Nielsen will be able to tell how frequently and how long households view broadband-delivered content; however, the ratings company won't necessarily be able to identify viewership in relation to specific shows and movies. To know precisely what participating households are viewing, Nielsen needs cooperation from content providers (e.g. Netflix and Hulu).
Netflix though, doesn't put much stock in traditional Nielsen-style ratings. "When you say ten million people watch a show, that really doesn’t tell you anything," Netflix executive Ted Sarandos recently stated. With the absence of being propped up by television commercials, Netflix need care only about its subscriber base -- something that unique, high-quality programming can help drive.