Cable systems to take on Nielsen

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Cable system operators are talking to media agencies about new audience measurement systems that could rival Nielsen Media Research's digital offering.

Comcast and Cox Communications are among the operators trying to gauge demand for a paid service that would reveal not just basic viewership information, but also how consumers navigate an on-demand universe.

Debbie Mullen, VP-marketing and new media for Cox Media, said the company is in exploratory talks with agencies. There are hurdles, she said, including the size of the investment required to build sophisticated databases and the issue of consumer privacy. "We have not made a decision to capture that data," Ms. Mullen said.

Still, media buyers salivate at the prospect of gaining an added level of details about viewers' habits from cable companies. Cable companies can potentially tell agencies many people are ordering content on demand, and offer demographic and geographic details about those viewers. The companies can also track how many people fast-forward through commercials.

major threat

Some say a cable industry-backed measurement system is a major threat to Nielsen. Tim Hanlon, senior VP-emerging contacts at Publicis Groupe's Starcom MediaVest Group, said "the future of television is going to need a much more sophisticated measurement system than one that the current ratings methodology provides. This is Nielsen's game to own or lose."

Nielsen is somewhat secretive about its plans to measure video-on-demand services or time shifted TV viewing, according to agency executives. Nielsen said it is already working with cable operators-it won't identify which ones-on a system that would encode TV shows and movies to facilitate tracking. Now Nielsen can measure the time spent on a VOD channel, but not what is ordered. Anne Elliot, VP-communications, Nielsen, said there are complex issues to be ironed out, such as whether to count viewing on a daily or weekly basis.

According to Jupiter Research analyst Todd Chanko, VOD services are projected to be available in 16.8 million households in 2004 (or 25% of all cable households), rising to 31.1 million by 2008.

Mr. Hanlon chairs the Advanced Television Group committee at the American Association of Advertising Agencies and has spearheaded discussions between agencies and cable operators. In February, the group released a paper titled "On Demand Television Metrics Guidelines," which asked cable companies to provide them with figures that would help define "gross universe counts."

For agencies, even being able to identify a known universe in VOD has been difficult. Bob Flood, exec VP-director of national broadcast at Optimedia Group, said, "There is a footprint question first. Technology may be available to people, but how many elect to use it?"

`dialogue in motion'

According to Jupiter Research, only an estimated 4.6 million homes actually access VOD services per month.

The cable companies are set to respond to those guidelines this month. Sean Cunningham, president of the Cable Advertising Bureau, said the debate was about to heat up. "While it is true that there is a lot of standards-level and common practice-level issues yet to be worked out among the multiple stakeholders in the on-demand equation, the very good news is the high level of dialogue already in motion," he said.

While cable MSOs might be eager to define new revenue streams through creation of measurement services, some believe their data are also likely to reveal some unpleasant facts about the numbers of people watching each cable station and even who watches the ads.

Cable channels that reach less than 30 million homes don't register significantly with the Nielsen sample, so many sell the breadth of their distribution instead. "Cable is really focused on subscriber penetration, but how many people are really watching when there's 215 channels, plus video-on-demand and personal video recorders?" said Mr. Hanlon.

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