Anyone who has worked in television for more than a minute or so learns that there are three sets of numbers that you have to care about.

The first are the ones that appear on your paycheck. Working in television is a job, and while your internal motivation for choosing this business may vary, we are pretty sure the main reason is that, like anyone, you would like to be paid for your work. (Last time we checked, we didn’t find that anyone was being forced to work in this industry.)

And as a person working in television, the second set of numbers that you should care about are the ones that you likely will never see. Those numbers would be the ones on the profit and loss statements that your employer generates each month, quarter, and year. Contrary to the belief of some, television is still a for-profit business. If your employer isn’t making any money — and continues for a period of time —  it is probable that you won’t be making money from them at some point in the future.

Finally, the third set of numbers that you should care about are what are usually referred to as simply “The numbers.” And those digits would be the ratings. More formally known as the measurement of the audience watching your station (or show, group, or network, as the particular case may be). The ratings are, simply put, the report card on what is shown on television at any given time. That report card can be issued as soon as the next day, or in some cases at the end of the month, or the end of a season—depending on the time period being measured.

Why ratings matter is that they determine how much your outlet can charge advertisers to run commercials on the station, so they directly determine a station’s bottom line numbers (the second set mentioned above), which in turn directly impacts the money your outlet has available to put into your paycheck (the first set we previously mentioned).

Much like your report card back in school, learning the ratings is how we all measure who is winning and who is losing. And not unlike the marks you received on your school report card, the numbers in the ratings can determine the future of your employer and ultimately, you.

Ratings come from two companies that exist in the industry. The proverbial 800-pound gorilla is, of course, Nielsen, a company that traces its roots back to radio in 1923. Originally known as The A.C. Nielsen Company, it has been the primary provider of ratings, first for radio, and later for television, over the course of its 100-plus-year history. The company has evolved from a methodology of asking a statistically representative number of people in the audience (known as “The Sample”) to record their viewing over a period of time, through the use of technologies that have evolved over the years. In the beginning, Nielsen asked viewers to keep a written record of what they watched (a “diary” of their viewing) over a period of time. Over the years, the same kind of discrepancies found in the testimony of “eyewitnesses” to events, led the company to develop technoloiges like the “Audiometer” and more recently the “People Meter” to make the process of accurately recording what viewers in the sample watched an automatic one that didn’t rely on anyone’s memory or their diligence in writing and mailing a paper record.

In 1949, Nielsen got a competitor in providing television ratings information. The new company was called the American Research Bureau or ARB. It would later change its name to Arbitron. In the mid-1960s, Arbitron began focusing exclusively on providing radio ratings, in part because of the larger number of radio markets and station clientele available. Some would suggest it was also motivated by the dominance of Nielsen in providing ratings for television. Ultimately, Arbitron would leave the television ratings business and focus only on radio. In 2013, it was acquired by Nielsen and is now known as “Nielsen Audio,” operating as the company’s radio ratings division.

It wouldn’t be until 1999 that another competitor to Nielsen would emerge. That year, a company called “Comscore” would begin using the still-emerging digital technologies around the internet to provide audience measurements for both digital and TV programming. It now bills itself as a “global provider of digital intelligence and cross-platform measurement.” 

Today, the business of providing audience measurement and ultimately “ratings” is a case of a small company (Comscore) competing against the dominance of the larger and older player in the space, that being Nielsen.

And yet, for as dependent as the television industry is on the measurement of the number and demographic breakdown of the viewers, the reality is that no available measurement and reporting of those viewers is without flaws and serious questions, which has left an uneasy relationship between those who produce and distribute television shows and those who make and distribute the audience data that drives most every other part of the television industry.

So when that most important of television programming, a National Football League game, recently appeared for the first time on the 800-pound gorilla of the streaming space (Google’s YouTube), the most asked question was, of course, “How many people watched?” Thus, the ratings for that particular television program would immediately be seen as a report card on streaming’s ability to deliver a football audience that was once the exclusive domain of traditional broadcast and cable television.

And Nielsen dutifully delivered the answer. YouTube had delivered its inaugural football contest to approximately 17 million viewers.

But a week after the game, YouTube said that the audience estimate was being adjusted upwards by about 2 million viewers, making the total nearly 20 million viewers.

Much like in a football game, when the replay officials change the original call, the folks in charge of analyzing the data at both Fox Sports and Disney threw their own red flag to challenge the ratings of the YouTube-delivered game. They claim that Nielsen created a special version of the method to measure the audience.

Matthew Keys, who publishes the Substack newsletter Multicastnews.com, provided this excellent coverage on this controversy.

This is not the first time Nielsen has been accused of something similar to the notion that George H.W. Bush used when he described Ronald Reagan's economic strategies back in 1980 as “voodoo economics.” (That term would later be part of a hilarious scene in the movie “Ferris Bueller’s Day Off” when it was part of a lesson being taught by a high school teacher brilliantly played by actor Ben Stein.)

The “voodoo economics” of television ratings centers around just how a relatively small sample of television viewers can accurately reflect the actual behavior of millions of television viewers. And given the vital importance of the ratings to the television industry—especially at this crucial juncture when the very nature of how people are (or aren’t) watching television is fundamentally changing—the trust in the accuracy of those ratings is no small thing.

For years, those of us who have worked in television have had our work judged by “the numbers” which television networks, stations, advertising agencies, and others spend a small fortune to obtain. In recent years, some local broadcasters have pushed back on Nielsen’s near monopoly in the ratings game, with some going so far as to drop the service for a period of time and either use Comscore’s ratings (which have their own potential shortcomings) or operate with no ratings numbers at all.

The various questions about the accuracy of Nielsen ratings have usually been swept aside by the assertions of the industry’s association that accredits audience measurement services, known as the Media Rating Council. This non-profit group oversees the standards and independent auditing of the ratings services, namely Nielsen and Comscore, along with newer digital upstarts such as VideoAmp and iSpotTV. The MRC gives ratings services their accreditation credential, which is meant to assure users of the accuracy of the ratings data provided by a given service.

In 2021, the MRC found that Nielsen undercounted viewers during the COVID-19 pandemic and took the dramatic step of temporarily suspending Nielsen accreditation. Just this past January, the MRC gave its approval to Nielsen for their new method of analyzing the data of audience viewing from “45 million households and 75 million devices.” This new measurement is known as “Big Data + Panel TV.” Nielsen’s CEO dutifully said at the time: “I believe Big Data+Panel gives the industry the most accurate measurement in the history of TV.”

Well, we’re certainly glad that it has only taken 75 years to get to this point.

You know, where the entire business is based on numbers that somehow still feel like…(remembering Ben Stein’s monotone voice from the movie now) “Anyone…anyone? Something... D-O-O economics?"

The dust-up over the Nielsen ratings for the inaugural NFL game on YouTube will likely settle down as these things always seem to do. After all, the co-dependency relationship between Television and the Ratings isn’t about to end, because each has too much invested in the other. And, as is often the case in such situations, even with the current reality which includes technology that can identify whatever you are doing online and deliver you an ad for that thing you were first thinking about just a few minutes ago, the TV ratings are still, as one station executive said to us years ago, "pretty much the only game in town."

Voodoo Economics, indeed.

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