Measuring Television Viewing

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Primarily, TV shows live or die based on how satisfied advertisers are with the quantity and quality of the viewing audience. Since 1950, the major organization that tracks and rates prime-time viewing has been the A.C. Nielsen Market Research Company, which estimates what viewers are watching in the nation’s major markets. Ratings services like Nielsen provide advertisers, broadcast networks, local stations, and cable channels with considerable detail about viewers—from race and gender to age, occupation, and educational background.

The Impact of Ratings and Shares on Programming

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NICHE MARKETS As TV’s audience gets fragmented among broadcast, cable, DVRs, and the Internet, some shows have focused on targeting smaller niche audiences instead of the broad public. IFC’s Portlandia, for example, has a relatively small but devoted fan base that supports the show’s culturally specific satire.

In TV measurement, a rating is a statistical estimate expressed as the percentage of households that are tuned to a program in the market being sampled. Another audience measure is the share, a statistical estimate of the percentage of homes that are tuned to a specific program compared with those using their sets at the time of the sample. For instance, let’s say on a typical night that 5,000 metered homes are sampled by Nielsen in 210 large U.S. cities, and 4,000 of those households have their TV sets turned on. Of those 4,000, about 1,000 are tuned to The Voice on NBC. The rating for that show is 20 percent—that is, 1,000 households watching The Voice out of 5,000 TV sets monitored. The share is 25 percent—1,000 homes watching The Voice out of a total of 4,000 sets turned on.

The importance of ratings and shares to the survival of TV programs cannot be overestimated. In practice, television is an industry in which networks, producers, and distributors target, guarantee, and “sell” viewers in blocks to advertisers. Audience measurement tells advertisers not only how many people are watching but, more important, what kinds of people are watching. Prime-time advertisers on the broadcast networks have mainly been interested in reaching relatively affluent eighteen- to forty-nine-year-old viewers, who account for most consumer spending. If a show is attracting those viewers, advertisers will compete to buy time during that program. Typically, as many as nine out of ten new shows introduced each fall on the networks either do not attain the required ratings or fail to reach the “right” viewers. The result is cancellation. Cable, in contrast, targets smaller audiences, so programs that would not attract a large audience might survive on cable because most of cable’s revenues come from subscription fees and not advertising. For example, on cable, AMC’s Breaking Bad and FX’s It’s Always Sunny in Philadelphia are considered reasonably successful. However, neither show attracts an audience of over three million; in comparison, CBS’s NCIS drew an average audience of 21.6 million in 2012–13.

Assessing Today’s Converged and Multi-Screen Markets

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During the height of the network era, a prime-time series with a rating of 17 or 18 and a share of between 28 and 30 was generally a success. By the late 2000s, though, with increasing competition from cable, DVDs, and the Internet, the threshold for success had dropped to a rating of 3 or 4 and a share of under 10. In fact, with all the screen options and targeted audiences, it is almost impossible for a TV program today to crack the highest-rated series list (see Table 6.1). Unfortunately, many popular programs have been canceled over the years because advertisers considered their audiences too young, too old, or too poor. To account for the rise of DVRs, Nielsen now offers three versions of its ratings: “live … ; live plus 24 hours, counting how many people who own DVRs played back shows within a day of recording them; and live plus seven days.”23 During the 2011–12 TV season, many shows—including ABC’s Fringe and the CW’s Vampire Diaries—actually drew larger audiences just from DVR playback than through their original first-time showing on the networks.24

TABLE 6.1

THE TOP 10 HIGHEST-RATED TV SERIES; INDIVIDUAL PROGRAMS (SINCE 1960)

Program Network Date Rating
1 M*A*S*H (final episode) CBS 2/28/83 60.2
2 allas (“Who Shot J.R.?” episode) CBS 11/21/80 53.3
3 The Fugitive (final episode) ABC 8/29/67 45.9
4 Cheers (final episode) NBC 5/20/93 45.5
5 Ed Sullivan Show (Beatles’ first U.S. TV appearance) CBS 2/9/64 45.3
6 Beverly Hillbillies CBS 1/8/64 44.0
7 Ed Sullivan Show (Beatles’ second U.S. TV appearance) CBS 2/16/64 43.8
8 Beverly Hillbillies CBS 1/15/64 42.8
9 Beverly Hillbillies CBS 2/26/64 42.4
10 Beverly Hillbillies CBS 3/25/64 42.2

Note: The Seinfeld finale, which aired in May 1998, drew a rating of 41-plus and a total viewership of 76 million; in contrast, the final episode of Friends in May 2004 had a 25 rating and drew about 52 million viewers. (The M*A*S*H finale in 1983 had more than 100 million viewers.)

Source: The World Almanac and Book of Facts 1997 (Mahwah, N.J.: World Almanac Books, 1996), 296; Corbett Steinberg, TV Facts (New York: Facts on File Publications, 1985); A.C. Nielsen Media Research.

In its efforts to keep up with the TV’s move to smaller screens, Nielsen is also using special software to track TV viewing on computers and mobile devices. Today, with the fragmentation of media audiences, the increase in third- and fourth-screen technologies, and the decline in traditional TV set viewing, targeting smaller niche markets and consumers has become advertisers’ main game.

The biggest revenue game changer in the small-screen world will probably be Google’s YouTube, which in 2011 and 2012 entered into a joint venture with nearly a hundred content producers to create niche online channels. YouTube advances up to $5 million to each content producer, and it keeps the ad money it collects until the advance is paid off; revenue after that is split between YouTube and the content producer. Some familiar names have signed on including Madonna, Shaquille O’Neal, and Amy Poehler (from NBC’s Parks and Recreation). Among the popular channels already launched are the music video site, Noisey, which had twenty-seven million visits in its first two months, and Drive, a channel for auto fans, which had seven million views in its first four months. (See “Tracking Technology: Don’t Touch That Remote: TV Pilots Turn to Net, Not Networks,” for more on YouTube’s foray into original programming.)

The way advertising works online differs substantially from network TV, where advertisers pay as much as $400,000 to buy one thirty-second ad during NBC’s The Voice or ABC’s Modern Family. Online advertisers pay a rate called a CPM (“cost per mille”; mille is Latin for “one thousand”), meaning the rate per one thousand impressions—which is a single ad shown to a person visiting an online site. So if a product company or ad agency purchases one thousand online impressions at a $1 CPM rate, that means the company or agency would spend $10 to have its advertisement displayed ten thousand times. Popular online sites where advertisers are reaching targeted audiences could set a CPM rate between $10 and $100, while less popular sites might command only a 10- to 20-cent CPM rate from ad agencies and product companies. For some of its new YouTube TV channels, analysts predicted that Google might be able to charge as much as $20 CPM for a relatively popular site.