Nielsen was the focus of much criticism during this past earnings season. Media CEOs one by one in their conference calls attacked Nielsen for reporting only part of the story—for inaccurate ratings, and for missing out on the growing mobile streaming of their shows.
Now Nielsen is about to get a lot more high-tech. It will launch measurement of streaming on subscription online video services for the first time. (The Wall Street Journal first broke the story).
"Our clients have been asking us to help them better understand how programming is consumed across its entire lifecycle...How do people consumer our programs across these platforms, and what's the relationship of a viewer of someone who watches on Hulu Plus, versus watching it live?" said Neilsen SVP Brian Fuhrer.
The key thing is Nielsen will be able to achieve this measurement without the participation of the companies.
Until now, there has been no data on how much people are watching shows on Netflix, Amazon Prime Instant Video and Hulu Plus. Other than data on spike in bandwidth use after a new show is released, or the fact that Netflix accounts for a giant chunk of primetime streaming, the media industry has had absolutely no information about how many people are watching the competition—Netflix and Amazon originals, like "House of Cards" or "Transparent." They also don't have any information on how much people are streaming their shows that they've licensed.
One key thing: Nielsen will be able to measure how much people are watching a certain show online—what time and how many minutes—but it will not be able to report what platform they're watching it on, so it'll be up to the media companies who have struck the deals with Amazon or Netflix or Hulu to determine which website the streaming is happening on. And, as was reported in the WSJ article, it does not include mobile viewing, which is where the growth is happening.
So what will this new information mean for Netflix and the traditional media giants who license it so much content? For Netflix, its investors and analysts might start evaluating those numbers to have a sign of its potential to grow and keep those subscribers hooked. We can be sure Netflix will remind everyone that those streaming numbers don't compare to traditional TV ratings. The fact that Nielsen is missing out on all that mobile viewing will surely be cited as well.
The media giants will surely examine the new streaming ratings for comparisons to their own shows, and for signs of impact from streaming on linear, ad-supported TV.
The past quarter earnings calls were also dominated by question about declining TV ratings, and what's to blame. Now we may have some data to answer that question.
Update--this story has been updated to include comments from a Nielsen executive.