Originally published at TDG Research on October 22, 2015
After almost two years of waiting, Nielsen has finally delivered on the OTT measurement system for which the industry has been waiting. Called “Total Audience Management” it promises to be a real game changer, boosting industry adoption of TV Everywhere.
This, in turn, will boost the amount of television being watched via OTT. Adoption of the system will launch a new era, dramatically changing the way everyone – from networks and MVPDs to the folks at home – looks at TV.
Nielsen currently has the advantage of being the only measurement system accepted by all parties: advertisers, networks and MVPDs. If the company can deliver on its promise of counting OTT views the same way it counts linear views, it could overcome the networks’ objections to releasing content for viewing on their own or MVPD TV Everywhere device apps.
If anything, networks are excited to enable this type of anywhere, any-device viewing as it will likely increase the amount of time people spend watching television. More viewing time means higher ratings and increased profits.
For MVPDS like AT&T, Comcast, and Verizon that provide both Internet and pay TV service, more OTT viewing via their TVE apps increases subscriber bandwidth use. An uptick in bandwidth use benefits multi-service providers because broadband is generally a more profitable business segment than pay TV.
Also, with Nielsen counting OTT views, TVE apps likely will become more attractive to networks, leading them to release more programming and demand fewer restrictions. This would make for a superior user experience – a win for consumers and providers alike.
Some Encouraging Stats
Nielsen revealed their Total Audience Management product to Adweek this week, while providing some initial stats for an unnamed network drama. This provides very encouraging news for the TV networks.
The first bit of good news: Nielsen found that 55% of the total audience watched the unnamed show live, with 14% watching via a connected device or OTT app (6% and 8%, respectively). Counting those additional viewers should provide a healthy bump to the show’s overall ratings.
But drill down to the 25-34 year old demographic, and those numbers are even more impressive. For that demo, only 15% of viewers watched live, while a whopping 40% watched via a connected device or OTT app (22% and 18%, respectively). Since advertisers covet these younger viewers, the jump in ratings that comes from adding in 40% of the 25-34 year old audience should certainly help raise network ad revenues. It may also reaffirm television’s overall stature as an advertising vehicle capable of reaching young adults.
The new ratings system eschews overnight or real-time ratings for a broader window, looking at views over the course of a week. This is more reflective of how people watch TV now, where “real time” has come to mean “this week” (or “before the next episode airs”) as opposed to “tonight.”
It is also important to note that many views are started on one device, continued on another and finished on a third. Allowing networks and advertisers to get accurate ratings for this type of quantum viewing will allow the industry to adapt to the way viewers watch TV today.
Coming Soon: The Rise of OTT
Now that the long wait for Nielsen is finally over, OTT can begin to come into its own. As OTT picture quality rivals that of QAM (the traditional cable TV delivery format), viewers will see numerous advantages to freeing themselves from the actual cable cords – not least of which being the aesthetics. Who really enjoys looking at yards of cable strung throughout the house?
As predicted in my Spring 2015 report on OTT Advertising, OTT viewing should approach 50% of all viewing within the next 5 years, eventually overtaking QAM.