It’s become clear to any research executive in the television business these days that what’s good for the viewer may not necessarily be good for the business. Take the digital video recorder. Its time-shifting and ad-skipping properties have helped its penetration skyrocket to one-third of the TV viewing universe in the last five years. Yet it’s those very appealing qualities to the couch potato that are causing an outbreak of headaches among researchers.
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Now, the very technology that created the headaches—the digital set-top box—may deliver the relief. In next few years, set-top box (STB) data could become an integral part of the TV ratings currency.
Mining audience data from STB devices that deliver TV content via cable or satellite is turning into the digital equivalent of the Alaska gold rush. A growing number of research and technology companies—including Nielsen (which owns AdweekMedia), TNS Media Research, TiVo, Rentrak and TRA—envision a promising business that can deliver audience viewing data of unparalleled precision based on millions of households. If those companies can crack the code, they may soon produce TV audience data using samples that dwarf Nielsen’s current 18,000 national people meter panel.
“People have always accepted Nielsen as the default. But as technology improves, there are other sources in the marketplace and we can get beyond minute-by-minute [data] and go second by second,” says Chris Allen, vp and video innovations director for Starcom USA, a big proponent of STB data that currently subscribes to TiVo and TNS. “Everyone agrees that the people meter sample is too small and is unable to measure smaller, niche networks.”
For years, planning, buying and selling TV commercial time has depended on one provider, one currency—Nielsen’s. The traditional approach relied on a laboriously built and relatively small representative panel of consumers. But recruiting and maintaining those panels doesn’t come cheap. Many would-be TV ratings providers (such as SMART, AGB and Arbitron’s ScanAmerica) have been crushed under the competitive challenge of building expensive panels in the hopes the industry would support them.
Now the industry has the potential to tap vastly larger panels pre-built and subsidized by viewer subscription dollars. The potential is hard to resist: buckets full of audience data that is there for the taking at very little marginal cost. For the first time in 50 years, alternatives to conventional TV ratings are not only possible, but they’re also probable.
“The biggest barrier to entry in TV measurement is gone except for getting access to the set-top box data,” says David Poltrack, chief research officer for CBS. “There is a chance for an entrepreneur to make a mark and establish a place in the marketplace for the first time.”
“It’s hard to say what will come out of this,” says Donna Speciale, president, investment and activation, and operations for MediaVest, which hopes to use TRA’s product-purchase ratings as a secondary guarantee in next year’s TV upfront. (TRA is fusing STB data with info from shopper loyalty programs.) “Our goal is to get more accountability. We’re working real hard to have a currency based on intent. But CPMs aren’t going to go away anytime soon.”
A HOST OF CHALLENGES
TNS Media Research in late 2004 became the first research firm to dive deeply into the STB data pool, setting up a trial with Oceanic Time Warner in Hawaii to provide the cable system with a usable data stream it could sell locally. By 2006, TNS offered the industry the first syndicated commercial service based on STB data from Charter Communications in Los Angeles, which has since done partnership deals with every research firm exploring the STB measurement business. Only last week it announced a deal with interactive program guide company Rovi to create proprietary STB measurement data.
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