Nielsen, Networks Face Changing Times

With Tivo, DVDs, video games and multiple TV households, who can keep track of viewing habits well enough to effectively use smart ads? The Nielsen rating service and TV networks are confronting the challenge.

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SCOTT SIMON, host:

For more than 50 years, the Nielsen ratings system has been the standard in the television industry telling the networks and advertisers how many of us are watching which shows and for how long. But over the years, household viewership has become more difficult to track. Families often have more than one TV set these days turned to two or more different channels. And there's TiVo and video games and DVDs. There's no easy way to track television viewership in public places. And how could traditional methods possibly reflect the way people actually view television these days? And especially, how many people really watch the ads? Reporter Rick Karr specializes in the field of technology and culture. He joins us from our studios in New York.

Rick, thanks for being with us.

RICK KARR (NPR News): You're quite welcome, Scott.

SIMON: And what dark science does Nielsen use to estimate an audience?

KARR: Well, the latest technology that they've been developing and trying to roll out nationwide is something that they call a People Meter. And essentially, it's a box that monitors what's on the television. And if you're a Nielsen family, there's supposed to be a People Meter on every television in the home.

SIMON: What are some of the drawbacks in the system that people have noticed?

KARR: You know, there are an awful lot of African-American and Latino activists who have complained that Nielsen underrepresents their numbers in the viewing audience with the People Meters. They say that people in minority communities tend to be reluctant to let someone who looks like an authority figure into the home, somebody who they don't know. Certainly, Latino activists say a lot of times the people Nielsen sends out to try to recruit Nielsen families don't speak Spanish. Nielsen, for their part, say that's nonsense. We actually make really good efforts. And if there are changes in the numbers between the old diary system and the People Meters, it's because we're actually measuring the audience better now.

SIMON: Surely in these days when we can charge people $3.75 for a cup of coffee, there's got to be technology that exists to tell the ratings systems exactly how many people are watching and what they are watching minute by minute.

KARR: You know, I think that the issue in the industry right now is more sort of the fragmentation of the audience and the fact that people's attention spans are moving away from television, in a lot of cases, especially if you watch younger viewers. If they don't like what's on, they may just stop watching entirely. The television's still on, but they're playing PlayStation or GameCube or whatever. So those are the kinds of dynamics that are very difficult, I think, for Nielsen to monitor. Now it's hard to know exactly what Nielsen is thinking because the company plays its cards very close to its chest. The argument that Nielsen executives have made to me in the past when I talked to them is they said, `Look, if we start revealing exactly how we do what we do or what we have coming down the pike, essentially it would be easier for people to hack the system.' And I don't mean crack into the boxes and do nefarious things. I mean, figure out ways to game this system. And so Nielsen feels a need to keep its plans and the actual techniques it uses pretty closely guarded. So don't really know where they're going.

SIMON: Is it safe to say that advertisers have a vested interest in saying to Nielsen, `No, no, no, you're way overestimating the audience,' and Nielsen has a vested interest in saying, `No, no, no, no, no, if anything, we're underestimating it'?

KARR: Yeah. I don't know if Nielsen is as much a player in that as the networks and the advertisers because, of course, they're the ones who are haggling over the price of ads. Nielsen tries to sort of stay above the fray. And, again, Nielsen executives have said to me, `Look, our clients are both advertisers and television networks, so we have to be as close to accurate as we possibly can because we have clients on both sides who have vested interests in skewing the numbers one way or another.'

SIMON: We should explain, too, there are people in public broadcasting who are concerned about it because the underwriters in public broadcasting also want some assurance that they have an audience and people are seeing their funding credits.

KARR: Yeah, I think that it does--it's an across-the-board issue for everybody except the pay networks. I think it's...

SIMON: HBO, Showtime, etc.

KARR: And, on the radio side, SIRIUS and XM, because they know how many people are paying them subscription fees every month.

SIMON: Reporter Rick Karr, who covers the way technology affects culture. Thank you, Rick.

KARR: You're quite welcome, Scott.

SIMON: And you're listening to WEEKEND EDITION from NPR News.

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