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Nielsen Calls for Subscription Streaming Viewership Transparency

14 Sep, 2015 By: Erik Gruenwedel

In a home entertainment market inundated with video subscription streaming options, media companies have welcomed the incremental revenue from licensing content to them. But at what cost to the traditional pay-TV ecosystem?

That’s a question veteran TV ratings service Nielsen would like to answer if SVOD services such as Netflix, Amazon Prime Instant Video and Hulu Plus were more forthcoming disclosing viewership data for their original and exclusive programming.

In an op-ed to The Wall Street Journal, Steve Hasker, president of Nielsen, and Glenn Enoch, SVP of audience insights, argue media companies could be currently underpaid for content licensed to SVOD services when factoring in the platforms’ impact on the traditional pay-TV channel bundle.

Citing third-party data, the executives said media companies generate upwards of $3 billion annually in license fees from SVOD. Netflix ended its most-recent fiscal period with more than $10 billion in third-party content obligations. At the same time about 100 million households in the U.S. pay about $80 a month for pay-TV, which when combined with advertising revenue, amounts to a $100 billion market currently under siege by SVOD.

Indeed, the pay-TV market continues to hemorrhage video subscribers, including more than 1 million in the recent quarter. Analysts contend most of the departing subs (i.e. cord cutters) are supplanting pay-TV with less-expensive over-the–top video.

While media companies have long licensed content to multiple distribution channels simultaneously, typically one channel didn’t cannibalize another channel. Now, broadcasters bristle at SVOD while watching their TV ratings decline. That’s because a streaming service such as Netflix isn’t compelled to reveal viewership data, citing a lack of advertisers to appease.

Instead, Netflix continues to benefit from an overheated stock (P/E ratio of 214) and financials that underscore strong subscriber growth globally (less so domestically).

While SVOD has paid handsomely for TV franchises such as “Seinfeld,” “South Park” (Hulu Plus) and “Sesame Street” (HBO), among others, that largess masks less lucrative license agreements mandated by a dearth of competing distribution channels, according to Hasker and Enoch.

“Only comprehensive, independent and comparable measurement of audience behavior on SVOD services will make it possible to get license fee pricing right,” they wrote.

Data tracking company comScore Sept. 14 announced a first-ever measurement software — dubbed Xmedia — that tracks user consumption of both TV and digital across multiple platforms.

“TV measurement has grown more complex over the past decade as it became possible for people to view content on their own terms and on their own time. At the same time, digital media has rapidly expanded from the PC to mobile to an increasing number of connected devices in the home,” Serge Matta, CEO of comScore, said in a statement.

Nielsen last year said it would begin tracking SVOD viewership — a move it said it is in discussions with studios regarding implementation. In response, Netflix CEO Reed Hastings said he was unconcerned.

"It's not very relevant," he told analysts at the time. "There's so much viewing that happens on a mobile phone or an iPad that [Nielsen won't] capture."


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