Big Data and Television.

How Nielsen Ratings Have Become Irrelevant

All your favorite shows are terrible performers in the ratings game. Mad Men, Girls, Breaking Bad, 30 Rock, Game of Thrones, Community, and Parks and Rec all perform relatively terribly when measured using the standard Nielsen ratings. You may ask why they are still on the air, because they are insanely popular. In fact, it is shows like this that illustrate a key flaw in the Nielsen rating system.

The way Nielsen ratings are generated is through monitoring 25,000 households across the country with a combination of a television monitor and self reported diaries. Nielsen then makes statistical inferences based on this sample of the population. The major flaw with this approach that these shows illustrate is the lack of consideration for DVRs or new online streaming services like Hulu and Netflix.  While Nielsen recently started offering ratings that include DVR viewers within three and seven days of original air, there is no real explanation as to why those two are the only offered timeframes or why these are not the default ratings used. If you include DVR viewers, Mad Men viewership increases by 127%, Breaking Bad’s by 130%.

Nielsen ratings also do not account for audience captivation or buzz generation. These things are of major importance to TV executives and advertising agencies alike. This can be shown using social media; during peak usage at least 40% of Twitter’s traffic is about television. Startups see this gap in the market, and are beginning to fill them. Two major players in this field are Trendrr and Bluefin Labs, both gather data from social networks and offer slightly different perspectives on the data. Trendrr focuses on the ability to do real-time analysis, while Bluefin tracks user engagement with ads. Both of these new rating systems point out another thing that Nielsen does not track, piracy.

Piracy may not be a good selling point to advertisers, but it should be to network executives. With more popular shows being illegally downloaded millions of times per week, there is a significant opportunity for executives to increase viewership by figuring out how to convince pirates to view these shows legally.

So what does this mean in regards to big data? What it really shows is an opportunity. Big data analysis can, and likely will, change the way that shows are judged. With Trendrr and Bluefin Labs leading one facet of the possible analysis these changes have already begun. But there is a much bigger way that improvement could be made in ratings. Now 25,000 families viewing patterns may sound like a lot, but what if you could increase that number by orders of magnitude. Netflix has 29.4 million subscribers whose view patterns they are analyzing, and Hulu clocks in at around 38 million, suddenly 25,000 seems like child’s play. And with taste becoming more and more fragmented and niche, how certain can you be that the less than .03% sample of the population is generating an accurate representation of the remaining 99.97%.

Sources:

http://www.wired.com/underwire/2013/03/nielsen-family-is-dead/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wired%2Findex+%28Wired%3A+Top+Stories%29

http://en.wikipedia.org/wiki/Nielsen_ratings

http://www.statisticbrain.com/hulu-statistics/

http://en.wikipedia.org/wiki/Netflix