Until now, industry methodologies have not included in their ratings calculations any viewers watching TV anywhere outside of the home. In other words, large groups of viewers gathered in out-of-home locations such as bars and restaurants, health clubs and college campuses currently are not counted.
This is significant, of course, because these omissions resulted in a systematic under-counting of any programming watched by people in these places-programming that is often consumed in groups. Sports TV, given the inherently communal viewing behaviors of sports fans who watch their favorite teams and events with groups of friends and fans outside of their homes, has been under-reported for decades. This is about to change, marking a huge shift not just for the people who make and show sports programming, but also for advertisers and for the sports business itself.
LOCATION, LOCATION, LOCATION
Now being tested is a portable people meter (PPM) that will be worn by volunteers in Houston. The PPM will read an encoded audio message that is embedded into the audio track of every piece of media (including, for example, TV, radio and the Internet) that has sound. The volunteer will wear this device, similar to a pager or cellphone, so the PPM will be able to tell where and when the media is being consumed.
Today, the Nielsen system only measures in-home viewing. With the PPM, if the people are watching the game at their corner pub their PPMs will ensure that their viewing preferences have been counted.
The information about to come out of Houston will be to sports what cable was to TV.
How many times does a person walk down to the corner bar to watch an episode of "E.R.," "Desperate Housewives," "King of Queens" or "Boston Public"? Rarely. How many people invite friends over, week in and week out, to watch these shows in their homes over nachos and beer? Relatively few. But, how often does someone go to a gathering place to watch NFL or college football, NCAA basketball, Nascar or MLB playoffs? Every night. Millions of people consume sports every night across the country in a variety of ways that have never been measured.
DO THE MATH
Without question, the current way of measuring in-home viewing skews toward entertainment programming. Currently, it is estimated that 10% to 20% of all TV viewing is done outside the home. A vast majority of that out-of-home audience, it stands to reason, is watching some game or other sports programming. Nationally, with 8,000 Nielsen households, that means that as many as 1,600 viewers' choices are going uncounted.
Do the math. Say, for the sake of argument, that 60% of these folks are tuned into an NCAA tournament game while at the bar or on the elliptical at the gym, that's 960 new viewers added to the mix and nearly a 12 rating on its own!
All right, so that's taking the argument to an extreme, but there's little doubt that the PPM system will drive up ratings. And higher ratings will, in turn, drive up the value of all sorts of sports properties. For example, Notre Dame football, with its huge following, will become much more valuable. ESPN, on continually in nearly every bar and health club, will experience huge ratings growth.
In turn, revenue for sports-media content, especially live events, will grow significantly. Growth in audience numbers along with precise data on who is watching will drive it. The door will get wider for media offerings surrounding these big events. Networks will charge more for the sports they telecast. The leagues will charge the networks more for rights fees. The owners will have a bigger pie and the players will be paid more.
What does this mean to the TV landscape? Programmers will begin to see the value of scheduling sports in prime time. Sitcoms, dramas and news magazine shows will face tougher competition for prime-time slots from live sporting events.
So, the experiment that is starting in Houston will have a permanent and lasting effect on the world of sports and traditional TV real estate. Finally, we will have a truer measurement of the legions of sports TV viewers and their demography.
Instant replay is nothing next to this. Higher sports ratings and the ensuing big money train will make the PPM the most significant technological advance in modern sports history.
Charles N. Besser ... is the founder, chairman and CEO of Intersport. Intersport is an independent producer of original sports programming for all of the major sports outlets: ESPN, ABC, CBS, FOX and NBC.