As a seasoned film enthusiast with decades of immersion in the dynamic world of media and entertainment, I can’t help but be intrigued by this latest development between Paramount Global and Nielsen. Having closely followed the ebbs and flows of the television industry for years, it’s clear that this is a significant turning point, not just for Paramount, but for the entire media landscape.
Paramount Global is getting ready to smack Nielsen with a ruler.
According to two sources knowledgeable about the situation, Paramount Global has informed its advertising sales team and top executives from major media-buying agencies that they are on the verge of phasing out Nielsen ratings data. This decision is part of an effort to explore alternative methods for audience measurement, a shift that’s particularly relevant as traditional media companies strive to accurately track viewers who consume content across digital and social platforms.
For several months, the two companies have been in negotiations regarding the renewal of their existing contract, but they are yet to find common ground when it comes to pricing. These sources claim that the current agreement is set to expire on September 30, and if a new one isn’t agreed upon, Paramount (the company operating CBS, Comedy Central, Nickelodeon among others) will no longer have access to Nielsen’s audience data from October 1.
Paramount Global and Nielsen both declined to comment.
Stepping away from Nielsen isn’t a decision we take lightly, as we’re still optimistic for a resolution,” I, speaking on behalf of Paramount ad sales, recently penned in a letter to media agencies. “In the meantime, we’re reaching out to you, our partners, for support as we maneuver through this situation. In instances where Nielsen data is unavailable, we plan to lean on VideoAmp, a competitor in audience measurement services that has formed partnerships with various networks and buyers in recent times.
According to a source inside Nielsen, the company believes its services remain highly valuable. They’ve expanded their data collection methods, now including analyses of specific audience segments and individuals who watch shows in non-traditional settings such as hotels, bars, and other out-of-home locations. This source indicates that the broader industry will still receive ratings for Paramount properties if a fresh agreement isn’t struck.
Without Nielsen, Paramount might struggle to endure for an extended period. The company’s data remains crucial to the financial structure of the media industry, as advertisers rely on Nielsen’s statistics to determine advertising costs. For instance, when it comes to upcoming events like their Sunday football games on CBS and the vice-presidential debate moderated by CBS News on October 1 (the day Paramount would be without Nielsen’s traditional measurement service for the first time), Paramount will undoubtedly require Nielsen’s numbers.
At issue is a long-running complaint from TV networks that Nielsen isn’t measuring the many different audiences for their programming as well as it should. As smartphones, mobile tablets and broadband-connected TV’s gain more consumer acceptance, audiences are increasingly able to stream their TV favorites in on-demand fashion, making the task of counting them exponentially more difficult. TV networks have long based their advertising rates on Nielsen’s measure of linear TV audiences, which have slipped as consumers embraced Netflix, Hulu, Amazon Prime and other streaming and on-demand options.
It’s reported by someone knowledgeable about the matter that executives at Paramount question the wisdom of continuing to pay a high fee for Nielsen measurement services each year, as they believe it’s not financially beneficial for their company.
“Nielsen is insisting on substantial price increases across all their products, including linear measurement, despite the changing economic landscape of our industry. Nielsen’s costs as a percentage of Paramount ad revenue have quintupled over significant parts of our business over the last years; in certain instances, Nielsen’s fees already exceed the total advertising revenue of the network being measured,” Halley said in the letter. “This has led us to conclude that the model, as proposed, is not workable, and that the cost structure requires re-engineering.”
Paramount aims to make substantial cost reductions. The company is set to be acquired by Skydance Media, and its current leadership team is already taking steps to shed approximately $500 million from operational expenses. Skydance Media has outlined a strategy aiming to further cut costs by a whopping $1.5 billion.
Historically, Nielsen and parts of Paramount have had disagreements. Towards the end of 2018, CBS stopped working with Nielsen due to a similar pricing disagreement. For approximately 20 days, CBS lacked data from Nielsen.
Networks have never had a favorable relationship with Nielsen, viewing it as a critic who often seems intent on lowering grades rather than appreciating good work. However, this dynamic has become increasingly strained in recent years, with networks expressing doubts about Nielsen’s technology and actively seeking alternative methods for audience measurement.
Advertisers are open to new measurement providers such as VideoAmp, ComScore, iSpot, and others. However, they persistently trust in Nielsen, despite the networks’ persistent complaints.
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2024-09-26 20:17