Nielsen to Include Set-Top-Box Data in Ratings for First Time

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Nielsen has struck a deal with Dish Network for the national satellite TV provider's set-top-box data to be used to enhance the measurement company's ratings. Photo: Getty Images

Keach Hagey

Keach Hagey

The Wall Street Journal

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April 4, 2016 6:00 a.m. ET

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Nielsen ratings are no longer going to be powered by the 40,000-person Nielsen panel alone.

The measurement company has struck a multiyear deal with Dish Network ^[8] DISH 0.06 % ^[9] to use the national satellite TV provider's set-top-box data to strengthen its methodology for measuring television viewing in both local and national markets.

The deal is Nielsen's first for a pay-TV provider's set-top box data with the intent of using it in ratings. The expansion to Nielsen's model comes six months after comScore merged with set-top-box-data-powered Rentrak in a deal aimed at eroding Nielsen's dominance over TV audience measurement.

Nielsen plans to use the use the anonymized data from Dish's 14 million subscribers' set-top boxes to get a more granular look at viewing patterns, particularly for niche shows and small markets. The set-top-box data offers a recorded look at what individual households are actually viewing, which will enhance Nielsen's data that currently estimates audiences based off a panel that's representative of the American viewing population

Right now, Nielsen doesn't report data for programs that attract fewer than 10,000 viewers, but that will change with Dish's data, said Steve Hasker, chief operating officer of Nielsen.

"For some of the smaller networks and places where there is a more fragmented audience, it gives us a more accurate, granular read," Mr. Hasker said in an interview. "It lets us represent the entire viewing population through the panel and dive into some more niche viewing at the same time."

Dish, which renewed its long-standing deal with comScore (formerly Rentrak) on Friday, said it was eager to work with Nielsen because, unlike comScore, Nielsen's ratings are used as the currency upon which ads are bought and sold.

"From our standpoint, as a group, we have obviously worked with Rentrak, and Rentrak has made strides, but this is a currency business, and to have Dish's data to be included in currency is good for everybody," said Warren Schlichting, Dish's executive vice president of marketing, programming and media sales.

The deal represents a major breakthrough for Nielsen, which has been trying for years to get pay-TV providers to license their set-top-box data. Last year, Comcast ^[10] CMCSA 1.29 % ^[11] rebuffed Nielsen's $100 million offer for an exclusive license to its data, The Wall Street Journal reported. (Notably, Nielsen's deal with Dish isn't exclusive.)

Part of the problem, Mr. Schlichting said, is that pay-TV providers have been somewhat paralyzed by the value of their data, unsure if it's better to license it to the marketplace or hoard it for competitive advantage.

Nielsen will begin by rolling out the enhanced ratings in local markets, where complaints have been loudest about the limitations of Nielsen's panel methodology's ability to capture all viewing—particularly in the smaller markets where Nielsen's panelists have to fill out diaries rather than have their viewing measured electronically. It will then expand to national markets, though there is no set timetable for that switch.

"We think that this is a significant improvement, but we are not going to spring it on anyone," Mr. Hasker said. "It will be a process of integrating the data and running the results by clients."

The potential impact of making Nielsen's ratings more comScore-like is complicated. Generally speaking, comScore's (formerly Rentrak's) ratings would come in 20% to 30% higher in local markets for broadcasters, according to local television executives. That was due, in part, to its methodology, which would count every television in the house as a separate viewing impression, while Nielsen would average them out. ComScore's ratings have been steadier than Nielsen's for smaller markets since it has a larger sample size, but executives worry they may not be as accurate, in part, because comScore doesn't have access to all pay-TV providers.

ComScore says it processes set-top box data form 17 million households, including data from Dish, AT&T ^[12] T -0.31 % ^[13]/DirecTV, Charter and Cox.