Should We Trust Nielsen Math?
After reviewing Nielsen/Gracenote’s 2023 State of Play report, Data-Driven Personalization: The Future of Streaming Content Discovery, I found the numbers they cited to be very much on the creative side. I don’t get a warm, fuzzy feeling when I think about their research.
Nielsen and Gracenote (Nielsen’s content solutions business unit) say that when you sit down to watch something, there are now more than 2.7 million titles from broadcast, cable, and streaming to choose from. In the 2021 report, this number was almost 1 million lower. So, the first message the report conveys is that things have grown at a remarkably fast clip. But this is just the tip of the iceberg.
The report goes on to state that 2.3 million of those 2.7 million titles—86.7%—are streaming titles. So, the second message is that streaming is getting the lion’s share of the viewing, and then some.
The third message is where things start to enter another dimension when it comes to plausibility. This report draws on a survey sample collected during a 2-week period in June–July 2023 and counts programming from five countries combined: the U.S., the U.K., Canada, Mexico, and Germany.
Source: Nielsen/Gracenote State of Play 2023 report
Realistically, most viewers—let’s say 99.99% —are not searching these five countries for viewing at one time, which makes this an unusual, and potentially misleading, way to present data. Unless the only businesses Nielsen did this research for are large media companies distributing to all of these countries or large conglomerates advertising in all of these markets, I’m not clear on why the research lumped these countries together.
I wanted to try to distill it down to something I’m hoping will be more precise. In the interest of accuracy, I did some napkin math using a ruler to measure the graph on my computer screen. According to my calculations—which I’ll call the fourth message of the report—the actual numbers are a lot smaller. Here’s what I came up with as the measurement of titles on streaming services by country:
- U.S.: 900,000
- Canada: 400,000
- UK: 500,000
- Germany: 400,000
- Mexico: 150,000
My total is 2,350,000. Nielsen’s total is 2,346,171, so I’d say we’re pretty close.
So, depending on your country, you may have as many as 900,000 titles to choose from and as few as 150,000. Both numbers are still large, just nowhere near the aggregate number the report put forth when it combined all five countries.
The fifth message of the report is the amount of viewing locations. It states, “Gracenote Global Video Data had a record of more than 39,500 distinct channels for audiences in the U.S., U.K., Canada, Mexico, and Germany as of June 2023, with the U.S. accounting for nearly 80% of them.”
Source: Nielsen/Gracenote State of Play 2023 report
The report goes on to say, “Each channel represents a unique source of linear programming, such as ABC and Flicks of Fury, an original channel on Pluto TV. Separately, there are more than 167 unique streaming video sources, with each representing an individual provider, such as Netflix and Disney+. This view of where video engagement is taking place is much different than a consolidated list of channels within a single cable package.”
This fifth message is where I start to enter deep waters. There are 167 unique streaming video sources, each of which represents a different provider. How do we get from 39,500 distinct channels to 167 unique streaming sources? I’m unclear. On average, 39,500 channels divided by 167 video sources equals 236.53. Does this mean each provider distributes, on average, to 236 platforms?
The sixth message is that in the U.S., SVOD viewing dropped to 49% of all streaming by May 2023. AVOD grew to 26%, and MVPD/vMVPD streaming (broadcast content distributed through digital channels or apps) grew to 15%.
The seventh message is that, as of June 2023, there were 1,400-plus FAST channels. This breaks down as follows:
- U.S.: 1,073
- UK: 206
- Germany: 108
- Other: 37
The U.S. is clearly where FAST has exploded. Will it do this well elsewhere? After reading the report, I did a quick check-in with a friend who is a technology executive to get a bit more detail on FAST.
“One aspect of FAST ad revenue is measured in CPM [cost per 1,000 impressions] and fill rate,” my contact told me. “In the U.S., you could confidently tell content owners to expect a CPM between $12 and $18, but if you have premium content, you are in another realm. Charter, for example, is probably in the $45– $90 CPM range.”
Regarding fill rates, my contact said, “In the U.S., you should expect 70%–90%. The rest of the world is looking at much smaller CPMs and much lower fill rates, meaning viewers are seeing a lot of annoying ‘We’ll be right back’ slates and more than likely seeing the same ad every single ad break.”
Content Overload and Fragmentation
The eighth message in the report is that viewers now spend an average of 10.5 minutes trying to find something to watch. In the 2019 report, this number was close to 7.5 minutes. This is one of the first credible numbers I found.
To take a few leaps of faith, if there is a huge amount of content, and the premise now is that viewers are abandoning subscriptions in favor of ad-supported viewing, then there’s a need for better metadata tagging to make subscriptions more appealing. By the way, better metadata is, coincidentally, precisely the product that Nielsen/Gracenote offers.
The last message is my takeaway. There is a huge amount of fragmentation, business models have shifted, and viewers are overwhelmed with content. Understanding what to do about this is very important, but how about being more transparent, for starters? How do you define a piece of content, what do you mean by a channel, and where are consumers viewing? How this breaks down is much more important than anything else that comes next, because if your numbers aren’t trustworthy or clear, we need to have a different conversation.
Ad buying is changing. For example, now you can buy from an agency that has deep knowledge of data around local viewing, or you can go to a TV manufacturer that has deep knowledge of all of the viewing on its hardware.
For this column, I spoke with Larry Allen, VP and general manager of data and addressable enablement at Comcast Advertising, about a question that lands firmly on the deterministic side: "What is addressable advertising?" The term "addressable" refers to targeting digital and broadcast inventory and being able to buy audience segments on a household level.
Now that ad dollars are moving from broadcast to digital via CTV buys, maybe we need to accept that the measurement standards for digital and broadcast are always going to differ.