Netflix's refusal to disclose ratings has led to mounting frustration from traditional television industry executives.
PASADENA, Calif. - Tensions between Netflix and traditional television networks escalated this weekend after industry executives expressed mounting frustration over Netflix's refusal to disclose ratings.
At a Television Critics Association event, NBC Universal introduced viewership figures last Wednesday provided by an outside firm that suggested several of Netflix's shows fall in line with broadcast and cable shows, implying that traditional television remains vibrant. On Saturday, John Landgraf, the chief executive of the cable network FX, picked up the theme, saying it was "ridiculous" that Netflix did not release viewership numbers.
Why does ANYONE have to release viewership numbers?
The broadcast networks don't have the technical ability to measure their audiences directly, like Netflix can, so they need to use a third party like Nielsen. My guess is that they could have gotten the data exclusively (along with it being shared with advertisers, who are the ones that really care), but Nielsen would have charged much more for that; so Nielsen releases the data to the public, and the networks/advertisers get to use it as well.
Netflix has no need to be a part of this, since they don't have advertisers. If the traditional networks want to engage in a pissing contest based on these ratings, let them.
No, Nielsen does not "release the data to the public". Only the unimportant "top line" ratings numbers are made public -- these are not the numbers advertising decisions are based on.
It is absolutely true that Netflix has no need for third-party ratings, but that's only because they don't sell advertising. Advertisers do not in general accept unaudited, seller-generated audience figures: there's simply too much room for dishonesty. Of course, a lot of the "honest" numbers advertisers do use are in fact bogus, but since everyone is using the same wrong numbers, this keeps the playing field level. (There are still legitimate disputes over the reliability of ratings data, but most of the error is thought to be a result of sampling, and therefore should average out over time. Problems with ratings methodology other than sampling may contribute to consistent, systematic errors -- resulting, for example, in certain kinds of radio formats being either under- or over-rated depending on who you ask.)
That said, many non-advertising-supported broadcasts are covered by the ratings at the behest (and expense) of their advertising-selling rivals: even some private in-store "radio" services are encoded for the radio ratings by Nielsen Audio, because it helps create a more accurate picture for advertisers looking to buy particular demographics.[1] What I'm sure must be frustrating to the commercial TV people is that they need Netflix's cooperation to allow Netflix's streaming service to be measured for TV ratings, and Netflix hasn't been offered enough money yet to accommodate their desires. Since Netflix has no incentive to bear the very real costs of doing so on its own, the situation is likely to remain stalemated.
-GAWollman
[1] These services do not appear in the "top line" ratings Nielsen Audio makes available to the public in PPM-measured markets, but Nielsen customers can pay for studies to be done that include them, and of course some of those stores do advertise on radio and TV and use the ratings as buyers.
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