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August 15, 2006

The VCR Still Causing Controversy, Two Decades Later

The continued arguments surrounding the Nielsen ratings raged on into this week, with the new focus being on whether VCR recordings should count in viewer measurements for the new commercial ratings that will be released for the upcoming fall season.

While last week's debate centered on the company's announcement of partnering with Insight Communications to measure Video-on-Demand viewership patterns, the commercial ratings have returned this week, as companies argue over the measurement system that will help further set advertising rates.

Advertising agencies are claiming that programming recorded onto a VHS tape should not count in commercial ratings averages for the coming season since VCR viewing is not measured, only recording. And, since many people never watch programming recorded on a VCR or often record three or four shows they do not intend on watching in order to also record a show they DO want to watch, the numbers do not reflect viewership. And, of those viewers who do watch the material they record, it doesn't take a social scientist to guest the viewer behavior here--those commercials are going to be fast-forwarded through.

The ad agencies have continued concerns about the way the measurement system will work and have even called for the monitoring system used to help compile the commercial ratings data to be accredited from the Media Research Council. For instance, a few weeks ago, I wrote about Magna Global calling for significant changes in the ratings, including working toward a second-by-second ratings system, calling for more detailed measurements of DVR viewers, and asking for changes in the way commercial minutes are measured, since the ratings will count any minute that has commercial content in it as a commercial minute, even if the majority of that minute contains programming instead of a commercial. According to the statistics used by Magna Global, a third of programs recorded on a VCR are never watched, while as many as two-thirds of the viewers who do watch what they recorded fast-forward through the commercials.

These issues surrounding the VCR aren't a new point of contention from advertising agencies, but it has an even more immediate impact on these commercial ratings, which may have a significant future impact on how advertising rates are negotiated and purchased. However, the networks maintain that, since playback cannot be measured, the number of recordings should be measured because including the data is more accurate than excluding it.

While it isn't the second-by-second data, networks could avoid some of the controversy by adopting The Weather Channel's plan for true minute-by-minute ratings, as I wrote about last month, instead of averaging all the commercial minutes together for a particular program. It wouldn't be the second-by-second ratings that some are calling for, but it might help satisfy some of the critics. Then again, network executives are afraid of what they might find, since everyone knows that most people don't watch television for the commercials.

Then, of course, there's the larger problem: if the Nielsen measurement system is inherently flawed, you can continue drawing as many new data streams from that same sample as you want, but they are still not going to be as accurate of a measurement as one would need.


This is all interesting stuff Sam. About a fortnight ago it was announced that TiVo was launching a limited audience measurement system (see here: The interesting thing about TiVo's system is that it will provide data on ad-skipping initially and could potentially (undoubtedly through an opt-in) match data about programming habits and ad watching against demographic data. All of which provides a finer comb with which to style the hair of television advertising with. Potentially.

This, and the debate you discuss surrouding changes to the Nielsen system, represent a re-assessment of television's currency, which some might say is long overdue. And as with any currency re-assessment there is going to be a period of flux as the market readjusts. For a time I think it's going to be painful, particularly to hear it told by television networks, as I suspect the rating point will be down-graded. But then, the TiVo deal promises the ability to specifically (and perhaps precisely) measure engagement with particular audiences, and niche economics have generally commanded a higher premium or premium rate.

Posted by: Joshua | August 16, 2006 2:51 PM


You and your fortnights, confusing American readers everywhere. :) I had heard references to the TiVo system as well, which does bring further intersting questions to this Nielsen debate. I agree that all of these issues are part of a larger repositioning of how to measure viewer engagement, particularly the depth and true nature of that engagement. The downgrading of the ratings point will be hard, since it is the lie the industry is based on at this point, but it's going to have to be a simultaneous agreement industry-wide for this switch to happen. We're already seeing substantial negotiation over commercial ratings, and I'm assuming that somewhat heated negotiation process is merely a precursor of things to come for the industry.

With engagement becoming more and more of a factor, niche programming may become even more viable than it has, as we leave what David Thorburn always talks about as consensus television, in which all of the world's or a country's eyes were on the same couple of channels, to an increasingly splintered niche market, where a plentitude of content is available, borrowing Grant McCracken's term, and viewers are free to engage in any of that wealth of content, a la Chris Anderson's Long Tail theory.

I would argue that for almost everyone this measurement process will be better in the long run, but it's always scary to begin that process of change.

Posted by: Sam Ford | August 16, 2006 5:00 PM

This raises two other interesting questions, Sam, about residual rents and measuring advertising across platforms. I'm interested to see whether the re-valuation of the ratings point will take into consideration cross-platform advertising, or whether these are still held to be separate, especially given the recent announcement of Fox content moving to Google Vids and CBS finally putting some decent length content up on Innertube. Both these ventures are advertising supported. Furthermore, the SAG has recently signed a deal with American Federation of Television and Radio Artists that would see actor's paid royalties for commercials screened on the web, just as they do when ads are re-screened. Perhaps package deals might be coming soon?

On the topic of Thorburn's consensus television, Todd Gitlin bemoaned the splintering of the market in 1998, worrying that the buzz that arose around niche marketing in the 1990s would result in a fractured public sphere. Yet as Georgina Born points out ( national media organs are vital because they mirror democratic political systems - they speak to the nation as a multi-faceted constituency. While the mode of 'consensus' television can homogenise a national culture, I think Born is right to suggest that niche markets cannot, on their own, refute this. Some national system is required as a space where niche interests can communicate to and across the national space.

Posted by: Joshua Green | August 16, 2006 5:42 PM

We simultaneously have FOX creating pay-for-download content and making advertising-supported content available as well. It seems that the companies that are going to be the most successful are the ones willing to experiment the most with distribution and see what the fans want. But I think that there definitely has to be more packages created for cross-platform advertising. Product placement is another thing to take into account, which is, by its very nature, going to cross into every platform that the rest of the content does.

This moves shows in closer relationships with their advertisers, with cross-platform advertising, which can be good for profit but also presents several creative challenges with writers and potentially gives advertising growing power. The original sponsorship system was considered by dangerous with many on the content side of things because advertisers had the power to control content on shows they sponsored on many occasions.

That doesn't mean that these potential pitfalls can't be bridged over. But it does complicate things. As far as the niche markets vs. consensus television goes, the perspectivesw you present of Georgina Born and Todd Gitlin are vital here. Some question whether the concept of concept television is troubling to begin with, in that people weren't really watching the content for the same reasons or in the same ways, etc. The current market does seem more amenable to a very diversified democracy and a free market model.

Yet, in the journalism industry in particular, there is great fear of danger in being able to get exactly what you want to hear and to shield yourself from any ideas or perspectives you don't, the style of news that many have criticized FOX News for.

Posted by: Sam Ford | August 17, 2006 10:12 AM
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