Knowing Nielsen

For even the most addicted TV fan out there, the Nielsen rating system is somewhat of an enigma. I'd like to shed some light on it and maybe we can gain a greater understanding of why shows like Arrested Development, Freaks and Geeks and the likes get cancelled because of deplorable ratings.

The Nielsen Media Research company was founded by Arthur C. Nielsen in 1923 because of a heavily growing radio broadcasting and advertising industry. In the 1950s, the birth of TV broadened the horizons of Nielsen and to this day remains the official measurement service of what people are watching on their TV sets. Advertisers, broadcast, cable and satellite networks all pay exuberant amounts of money for Nielsen's service; partly because they need to know the programs and commericals people are watching but more because there is no other alternative to Nielsen in the market.

There are a couple of ways that Nielsen measures TV usage. These statistics are all based on a sampling of a larger population. A 5,000 household sample is used to represent what all of America is watching. The first of which is measuring TV sets. A "black box" like a modem is connected to all of the television equipment a person owns, VCR, DVD player etc. and silently measures exactly what that household is watching and calls it in to Nielsen's central computers in the middle of the night. The latest renovation to the service is the "people meter," which measures what an invidivdual person's TV usage is in a particular household. This is done by punching in when you are in front of your TV so Nielsen knows exactly who is watching. This method has unfortunately cut the ratings of broadcast stations such as KCET in half because the previous Diary method had people writing out what they saw in a week's time rather then having them punch in. Many times people would write out that they saw a show from start to finish when they did not. So the "people meter" method is cutting ratings for networks. The households that are chosen to become Nielsen homes are selected at random from different socio-economic backgrounds and ethnicities. Stations such as Telemundo can request more Latino samples and Nielsen has made accommodations like this in the past.

Nielsen ratings are the livelihood of programmers and advertisers. They are used like currency in the marketplace. When advertisers want to sell a product, they must find a show that is getting high ratings and is catering to an audience that will buy their client's product. So they will be willing to pay more for a spot that fits the latter requirements and the sellers of the spots can charge accordingly.

In regards to our favorite shows, programmers cannot produce shows that are not getting the ratings because they are not gaining anything from it. So even if 4 million loyal viewers are tuning in every week, that may not be enough to satisfy what a programmer needs to stay afloat.

We are at the threshold of big changes. With the promise of digitalization in 2009, there will be exuberant amounts of channels, further segmenting a market to the point where ratings on a program will be minuscule in comparison to the present. With the use of TiVo's/DVRs, people are watching TV when they want to and forwarding through commercials. And of course, there is the option of downloading shows; legally of course. There are so many other innovations in the works. Will Nielsen be willing to continue innovating its product to keep up with the changing of times or will it monopolize the market so there is no incentive to fix their product?