Ratings Firm Nielsen Tests New Method to Measure Online Viewers

As a growing number of consumers view content online, one of the biggest challenges facing the television industry is finding a reliable and universal method to measure this digital viewership. According to The Wall Street Journal, ratings giant Nielsen thinks it has the solution.  The firm is expected to announce Tuesday that it is testing a new tool to measure online video streaming with help from several major networks, including NBC, FOX, ABC, Univision, Discovery, and A&E.

The tool, called “Nielsen Digital Program Ratings,” will allow Nielsen to track viewership of online video streaming from each network’s own website. Once the networks are comfortable with the process and results, the goal is to then expand the service to third-party streaming services such as Hulu and YouTube.

The service is Nielsen’s latest attempt to adjust its ratings process in the face of online media. The growing number of “cord cutters” who prefer to receive television content online, along with younger generations of consumers who may not even own a television, have made the 90-year-old company’s method of measuring audiences increasingly irrelevant. Networks in turn are desperate to get advertising revenue for every pair of eyeballs, regardless of the method used to consume their content.

Adjusting to online content consumption requires not only a uniform way to measure viewers, but also a new way to report it. Online viewership does not yet translate to traditional ratings terminology, so Nielsen’s secondary goal is to introduce new measurement and reporting techniques that both content creators and advertisers will agree to, such as the number of unique viewers and their geographic location. More traditional ratings information, such as how long a viewer stayed tuned to a particular program, is still not able to be measured online with Nielsen’s software.

Despite its promise, a significant limitation of the new Nielsen ratings tool is that it is currently limited to streaming on computers; it cannot yet measure viewership on mobile devices. Eric Solomon, Nielson’s senior vice president for Global Digital Audience Measurement, understands the limitations but views the tool’s release as a necessary first step. “What we want to do with the pilot is prove this concept. We want to understand what some of the gotchas might be before we do a commercial release,” he told the Wall Street Journal.

While the networks are obviously eager to adopt any new process that may generate additional advertising revenue, there are benefits from Nielsen’s efforts for consumers as well. Innovative online streaming services such as Aereo can offer consumers an exciting and competitive option for viewing television content online. However, these services are currently locked in legal and PR battles with major networks due primarily to advertising rights. If Nielsen can introduce an effective measurement standard for online viewership, services like Aereo may thrive, providing consumers with even more choice and value.

In the end, however, what it all comes down to is data. Alan Wurtzel, president of Research and Media Development at NBCUniversal, summarized the frustrations of content creators and distributors. “We’re just not getting credit for [online viewership],” he said. “If you can’t measure it, you can’t sell it.”