Linear TV’s Moment of Greatness, Flickers

Linear TV has been having a tough time lately. Although rumors of its imminent demise are premature, those who confidently predicted the business was not being hurt by cord-cutting, for example, are being proven wrong. Long time sales executives, greatly respected by the industry, are being shown the door as sales revenues decline. 

As with T.S. Eliot’s Prufrock, I have seen Linear TV’s moment of greatness flicker. Here are some of the reasons why:

Wishful Thinking on Cord-Cutting

Back in 2013 at the VideoSchmooze Online Video Forum, industry analyst Craig Moffet stated that cord cutting de-accelerated in 3Q13, meaning that it was going down, unlike what was reported in the mainstream technology press at the time. According to Moffet, the fact that it was misreported as accelerating, “speaks to a desire in the tech press for parables – overthrowing the oppressive MVPDs. But the math tells you otherwise. There is no question that people are cutting the cord but it is not a torrent. It is a trickle.”

Obviously that was wrong. Less than three years later, the cord-cutting spigot went from a trickle to a rush and now in 2019, Mark Huffman writes that, “eMarketer predicts that the number of pay TV households in the U.S. will drop by 4 percent by the end of the year to around 86.5 million homes. It further expects the free fall to continue, with pay TV subscriptions falling below 80 million by 2021.”

Lesson: We have to stop feeling that others are out to get us and focus instead on the reality of the trends … and act.

Over-Confidence in the Loyalty of the Viewer

How many times have I read that today’s viewers still watch lots of live TV? In June 2019, the NCTA released the results of a study that showed that two out of three adults watch TV live. “Notably, of the people who said they watch TV live on a regular basis, two out of three (66 percent) are most likely to watch via a pay TV service such as cable. While apps and smart TVs are clearly on the rise for many, and especially among younger generations, the majority of people still favor sitting in front of a television to catch the latest episode of their favorite show, to stay up to date on the news, or to keep up with sporting competitions.”

But the Nielsen numbers tell a different story. According to Marketing Charts, which analyzes Nielsen’s viewing results, 3Q18 was the first quarter on record in which 18-34 traditional TV viewing (live + time-shifted TV) dropped below 2 hours per day and declined 23 minutes per day compared to 3Q17. The article stated, “In percentage terms, the amount of time 18-34-year-olds as a whole spent watching traditional TV (live and time-shifted) in 3Q18 dropped by about 17.2% from the previous year. Needless to say, that’s a huge chunk – a drop of about 1 in every 6 minutes in just a single year.”

So what is happening here? Digital has supplanted traditional TV for youth. In the same study, Nielsen reported that 18-34-year-olds “spent one hour more per day in 3Q18 using apps and the web on smartphones alone than watching traditional TV.” And notably, many 18-34s don’t watch traditional TV at all – only 73% versus 86% of all adults.

Lesson: Traditional TV is less important to younger viewers and time is on their side.

Dog Paddling to Retirement at the Networks

The inability of some top management at some companies to risk implementing momentous change (possibly forfeiting short term profit or even courting failure) is the silent killer of the network business model. Sometimes it is because the system rewards short term efforts - bonuses are bestowed on an annual basis based on the year’s performance. Sometimes it is from sheer shortsightedness where they just don’t see how innovations can help their business. Whatever the reason, these folks stick to the status quo, essentially dog paddling to retirement.

Without naming names, one company who didn’t see the value of set top box data 12 years ago is now struggling to catch up to the data wave and, perhaps somewhat relatedly, just reported an 11% drop in the company’s U.S. advertising revenue.

Lesson: Think and act long term, even if you are not around to see it.

“We have lingered in the chambers of the sea

By sea-girls wreathed with seaweed red and brown

Till human voices wake us, and we drown.” - Prufrock

The Confusion Between Data and Measurement

If you read enough about what is going on in our industry today, you will see that Data is an all-powerful presence. It seems to command every conversation and rule over every project. As statistician W. Edwards Deming once quipped, “In God we trust. All others must bring data.”
But in our effusive fealty to Data, we sometimes give it more unfettered control over decision-making than it deserves. Not all data is relevant and not all data is good and pure. It needs to be assessed, put into context and framed by measurement. While there is no measurement without some form of data, data alone is unusable unless it is put into a structured measurement framework.
So I knew you would ask for definitions. In the media world, data is essentially a rough and structure-less collection of different types of quantities that has the potential to be used to draw conclusions.  Measurement enables us to draw accurate conclusions from the data by creating a logical structure for analysis. Data needs a logical and accurate measurement to be useful. Measurement without data is irrelevant.

“There are a lot of companies and agencies in the market cobbling together raw data or portions of data and mistaking that for actionable intelligence,” noted Sean Muller, CEO of the TV measurement company iSpot. “In order to use data effectively, it’s critical that the inputs into a model are cleaned, normalized and contextualized properly or entire framework will be off. Doing things like attribution using data that is not measurement grade or that is ad-hoc in nature is like building a house on the beach without preparing for the weather and tide patterns. Things will crumble pretty quickly,” he added.

Today, there are all types of data being thrown off from devices, culled from the internet, collected by businesses and otherwise amassed through various means. Data takes on many forms and sizes. There is attitudinal data that is more qualitative (like a series of open-ended comments) and data that looks like a bunch of unrelated numbers (MAC addresses coupled with viewing levels).

In the old days of television measurement, companies such as Nielsen relied on small representative samples to project the full population of television households and viewers. They took their viewing data and created measurement using edit rules and algorithms that formatted and contextualized their dataset into a projectable larger behavioral context. And yes, it was fairly accurate … as long as your network had enough meters in the sample to get statistically reliable projections.

In 1985, Nielsen’s sample size of 5,500 represented approximately 84.9 million homes (or just less than 0.01 percent of all TV households) when media options were less fragmented. But as omni-channel options expanded and the number of viewing opportunities increased, this small a sample measurement just didn’t cut it anymore. Currently, Nielsen estimates 119.9 million U.S. TV households with a sample of 40,000, or just over .03 percent of total U.S. TV homes. To Nielsen’s credit, they continue to expand their sample to include more national meters, portable people meters and the incorporation of local meters into the national sample. All are steps in the right direction but it might still not be enough for the tiny members of our media club.

Today, ACR (Automatic Content Recognition) measurement in TV is shaking things up. Nielsen recently bought Gracenote, in part to help layer in a much broader sample set from TV makers, to collect information from the glass of TVs regardless of which device or service is being used to deliver content and ads to the home. But the challenge is how to add that specific data source into the traditional and profitable metric of GRPs. Independent companies like Inscape, which licenses glass level viewing detection from over 11 million VIZIO SmartTVs, are offering datasets that are being incorporated into new systems used by networks, agencies and brands.

“The world is awash in data but without context, it isn’t useful. And without proper measurement you can’t find proper context,” said Allison Stern, co-founder of Tubular Labs, which, she says, is the only company to measure social video on a truly global scale. “In Tubular’s case we organize a massive amount of data about social video and then using measurement we can find trends around content types, and the velocity, engagement rates, and even audience quality that helps people make decisions.”

The advancements of these new data sources, coupled with the exploration of new measurement metrics, is a healthy evolution for media from a delivery scorecard to business outcome attribution. Measurement companies such as iSpot contribute to that effort along with companies that offer cross platform planning tools such as Omnicom, VideoAmp and 4C. All of this is at the center of the new addressable advertising consortium, Project OAR, which currently has nine networks signed on. All of these efforts successfully move data from its raw form into a projectable measurement that can be applied to business intelligence.

 This article first appeared in TV[REV]

Header photo by Markus Spiske on Unsplash