Issues & Insights

Nielsen’s Bad Ratings Leave Viewers Behind

Source: Pxfuel.com, free for commercial use.

As many are aware, our ancestors kept time with sun dials and monitored the weather by watching the flight patterns of birds. But luckily for us modern folk, we have access to enormous amounts of precise and empirical data for our daily decision making.

Data of course is what keeps inventory on shelves, traffic flowing more smoothly, and people safely indoors before the storm hits. “In God we trust,” said noted management expert W. Edwards Deming, “all others must bring data.”

It is a peculiar sign then when a sizable and culturally critical industry has yet to fully avail itself to the data it needs and our consumer economy requires. As a result, the measurements of what appeals to Americans in their television viewing (and, now, smart phones, tablets, and computers) are barely more precise now than when we had access to just a handful of channels from which to choose.

The near-monopoly Nielsen Company has by and large handled this task, through an antiquated system of having a small group of “representative Americans” agree to fill out paper diaries or put boxes on their TVs to record their viewing habits.

Nielsen’s way of analyzing media viewership is dramatically outdated. It comes up decidedly short in determining who is watching what, when they’re watching, and on what device they are watching it.  Shockingly, during a pandemic when most Americans were trapped at home, Nielsen actually reported a dip in overall TV viewing.

And since television sets reached near saturation in American households in the late 1950s, Nielsen has widened entertainment and cultural blind spots by failing to accurately estimate the viewing habits of growing minority and immigrant communities.

Data measures what counts, and in turn determines who will be counted. As a general matter Nielsen’s antiquated methods undermine an accurate snapshot of Americans’ tastes and attitudes, a problem which can be especially acute for minority communities at risk of being ignored or left behind.

As one egregious example, the 46 million black Americans who view entertainment have a spending power of $1.4 trillion, larger than the GDP of all but 14 nations worldwide. When a community of this size is undercounted and disregarded by a data failure, there are punishing economic and social consequences.

And Nielson has no excuse for such continued oversights. According to Nielsen’s own research, Black Americans outpace the rest of the American population in ownership of smartphones, tablets, smart TVs and other streaming devices. This failure in data collection played a significant role in Nielsen recently losing their accreditation from the Media Rating Council.

A system that fails to measure some of us fails to measure all of us. The method that determines what advertisers pay to promote their products and which programs continue to be produced should not be three generations old.

Such a reliance on chisel and tablet methods weakens our economy and distorts our social mirror. Inaccurate, incorrect, or imprecise data can kill companies and the communities that rely on them.

The media and entertainment industry in the United States represents one-third of that economic sector worldwide.  Doesn’t it deserve a rating system worthy of its prominence, significance, and influence?

Nielsen’s obsolescence is further highlighted by their viewership data remaining strongly tethered to broadcast television, and not the myriad ways that people consume media today. This must be addressed by jettisoning the outdated, panels-based methodology which they stubbornly embrace, and which invites bias to creep into the system solely through the recruitment of willing participants.

A better approach is to obtain data about broad viewing patterns directly from the point of consumption or distribution, not from a recruited panel but at scale. For example, internet providers or technology companies such as cable multi-channel video programming distributors (MVPDs) or Smart TV manufacturers can provide the raw data from which to build a precise measurement.

This large-dataset-based approach puts individual privacy first; it uses large-scale information to passively collect the data needed to measure true media consumption across platforms and across communities.

In the midst of a digital revolution, this modern methodology aligns with how Americans – all Americans – are consuming media today, across multiple platforms and devices. It utilizes the latest technology to stay ahead of the curve, recognizing that technology will continue to transform the way people approach online and broadcast entertainment, how we stay informed, and how we connect with our culture at large. Most importantly, it ensures that the preferences of all audiences are captured, and all voices are counted.

Gerard Scimeca is an attorney, co-founder, and chairman of CASE, Consumer Action for a Strong Economy, a non-partisan free-market oriented consumer organization.

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1 comment

  • I was a Nielson family for TV roughly 10 years ago, up to the point I decided there was nothing on TV anymore and cut the cable. Despite being one of the one’s whose opinion counted, my favorite shows kept getting cancelled. Why? Who knows, shifting demographics maybe.

    Then, a couple of weeks ago, Nielson sent me a diary to record my radio listening experience. This is where the technology gap comes in. Like many Americans, I rarely listen to the radio anywhere other than my car. My cars both have handy channel change buttons, so I can scan stations without taking my hands off the wheel or my hands off the road. How well do you suppose I did keeping this paper and ink based diary while driving my car? I did my best, but the handwriting was a bit sketchy and the clocks in the two cars are out of sync with one another, so the data were probably sketchy too.

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