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Deal With It, Netflix: Nielsen Will Measure Online TV Viewing

Deal With It, Netflix: Nielsen Will Measure Online TV Viewing

Starting next month, Nielsen will begin measuring viewership of TV subscription online video services such as Netflix and Amazon Prime, The Wall Street Journal reports.

Netflix has been firm about its stance not to release ratings (and the company hasn’t changed its mind; Nielsen can measure viewership even without their participation). Netflix’s reasoning is that the company don’t need to release ratings. Since it isn’t ad-supported and relies on subscription fees, ratings are irrelevant. To Netflix executives, the more important question isn’t how many people are watching a given show at any given time, but how many new subscribers shows attract.

However, executives from pay cable networks like HBO and broadcast networks like FOX have complained without ratings, Netflix wants to compete with the big guys, but don’t want a level playing field.

Netflix CEO Ted Sarandos has countered that overnight ratings work against quality TV; his competitors say that if the numbers were good, he’d release them.

Meanwhile, TV studios that license content to Netflix have been frustrated about the lack of transparency. If they don’t know how many people are watching, how can they properly price their content? With the ratings disclosed, Netflix will no longer have the upper hand in negotiations.

“Our clients will be able to look at their programs and understand: Is putting content on Netflix impacting the viewership on linear and traditional VOD ?” Brian Fuhrer, a senior vice president at Nielsen, told The Wall Street Journal.

Based on Nielsen documents, The Wall Street Journal’s report also found that traditional television viewership continues to decline while streaming video consumption is on the upswing — and the two are likely correlated with findings showing that the more streaming video content viewers watch, the less traditional TV they consume.

Up until now, Hulu has been the only one of the three biggest streaming video services that has allowed Nielsen to measure its audience (but only on desktop computers). Neither Netflix nor Amazon will actively participate in Nielsen’s new measurement service. But the numbers will be released regardless. Netflix did not immediately respond to a request for comment.

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