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Wednesday, January 13, 2010

Set Top Box Data

Talk with any media researcher today and inevitably the conversation will come around to a general agreement that current TV measurement via Nielsen is antiquated. Some people despise Nielsen for their quasi-monopoly status; others such as I look at the daunting task they face in the world of 2010 and wish they would move faster to come closer to capturing our rapidly changing viewing patterns.

Also, in the same conversation there will be a mention of Set Top Box Data. People have a wide variety of opinions about what is going on and everyone has an idea of what they would like to see.

What is a Set Top Box? Strip away the jargon and STBs, as they are called, are really nothing more than computerized devices that process digital signals. There are several out there sponsored by different companies such as cable operators, satellite providers, and TiVo. And, it being 2010, Google is entering the fray as well. What do they do differently than a Nielsen meter? Plenty. It can be summed up in the new worn-out cliché that we hear with the mention on any STB—granular data.

Want minute by minute ratings? Would you like to have near perfect targeting by knowing how many of your audience buys a certain type of product? Would you like to know commercial viewing by second vs. programming data by quarter hour? Various versions of set top box data should be able to give you this. This has caused some to enthusiastically say that Nielsen is finished and will soon be swept away. Not so fast, my friends, some major hurdles remain.

Like many things that have taken place in the last decade with the digital revolution, there is a wild west aspect to what is going on. There are several types of STB out there and they are providing vast and fascinating data to clients and the media but there is no uniformity. Right now, from a consistency perspective, it is almost a Tower of Babel situation.

There are five providers of data—Rentrak, TiVo, TRA, TNS Media Intelligence, and Nielsen. A group called the Coalition for Innovative Media Measurement (CIMM) has a desire to come up with a single source measurement system to analyze TV and video consumption across all media platforms. CIMM, whose members include the major networks, four largest buying entities, and mega marketers Procter & Gamble, AT&T, and Unilever, seems to be a stronger group than the toothless tigers that we have seen in media research over the years. Perhaps they can get some collegial action from the five players although when the smoke clears in a few years, there should only be one player standing. And, like it or not, it could be a vastly changed Nielsen.

What is to like about Set Top Box (STB) data? Compared to the present, the sample sizes can be huge compared to what Nielsen provides today. This can seriously reduce sampling error and help smaller cable channels in particular which struggle especially in local DMA's where there may only be 330-400 meters even in a Local People Meter (LPM) market.

A seasoned media researcher put his finger on the biggest current problem with STB data: “At this point, set top box data can tell you what channel the HH was tuned to but does not have the ability to tell you who in the household was watching. This is a key obstacle that will need to be resolved before the “set top box” players will have the ability to seriously compete with Nielsen as the currency for the TV business.” He goes on to say that “the set top box data does not account for the ever increasing alternative screens such as PC and hand held device viewing which Nielsen is feverishly attempting to address today”.

From a practical standpoint, I received a few interesting comments. One old friend and still an active media researcher had reservations about the next few years when no one player emerges. “It will lead to time consuming analytics just like our online team spends their time cranking out. …….It is going to lead to a lot of extra time for our buyers. Still, I wish CIMM well. Nielsen needs a competitor.”

A thoughtful sales executive says, “All I know is that the mere mention of the more saleable aspects this technology has promised, is like nip to the sales-cats around here. It starts with the request for information possibilities that we will soon have as well as the myriad telescoping attributes to come. …We are all in love with the concept, if only because we recognize the need to move away from fossilized spot sales.”

Also, agencies and the media are squeezed. Look at how layoffs continue and most look at 2011 as a realistic comeback year. Data released in the Wall Street Journal this week indicates that in the last two years radio and TV broadcasting has lost 29,000 jobs which translate to 12.2% of their workforce. Advertising agencies were hit even harder with 27,400 or 14.2% of positions eliminated. Can people afford two services? Nielsen remains the currency and you have to stick with it for the next few years. I remember in 1986 when AGB came out of Europe and tried to take NTI on. Only CBS bought it as I recall, and a year later they went home. This will not happen here as people will demand significant improvement and the relentless march of technology will keep Nielsen off balance. And, Google is flirting with launching their own branded TV. One theory is that their web-enabled product may bypass broadcast and cable altogether. Unlikely, but intriguing! And, their set top box data would be fascinating and state of the art. (Separately, Google TV has been testing an auction market TV sales scheme with Dish Network and a few smaller players)

A few quick points about STB:

1) Do not confuse a huge sample with census data. Nielsen tries to draw a sample that truly reflects the population. For example, 10% of us still do not have cable or satellite. STB will not do this and by definition cannot.
2) STB homes have more TV’s, watch more, and have more money. This is great for certain products but it is not a microcosm of society.
3) We, as yet, do not know who is watching but this is one issue that CIMM will likely work with all players to overcome.
4) Five players in STB are too many. Agencies are stretched now, some severely, but if big clients demand more analysis, they will have to do some of it. A shakeout is inevitable with a merger or two a possibility.

A few issues that few are talking about—

1) STB gets at attentiveness. Imagine second by second ratings within a commercial. I have seen some of the early data and it is amazing stuff.
2) Pricing of TV will still be ruled by the law of supply and demand. STB data will not cause an overnight revolution. If the data works, money will pour in to certain properties. Habits of 60 years will not evaporate but will evolve sometimes swiftly; sometimes not.
3) The privacy factor—we are not talking extreme ACLU’s positions here. Your provider will know more about you than ever. How will an individual’s privacy be safeguarded in our new world?

Can Nielsen just pre-empt everyone and stay on top? It is possible and it is tough to bet against them. But, the stakes are bigger now and the changes much swifter than in the past.

This will be the most interesting change in media over the next five years.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com


  1. Will subscribers be able to opt-out to protect their privacy?
    - Britt Bensen

  2. Britt--great question. Right now, there is no set top box national sample that is used as a TV ratings currency. Several years from now, the privacy issue will certainly become a bigger factor when one comes into being. Interestingly, Google has behaved so well with the data that they have on users that I think that privacy has taken a back seat as a result. That will not likely continue.