A little musing about TV business and ratings from me again … (well, my interest for TV, film, fandoms goes beyond entertainment, social scientist talking, so, please bare with me)
To me it looks like even the authors on Huffingtonpost are getting only part of the point. How many people watch a show, how dedicated they are is not the main thing but what brings revenue and profit. The rating-system is only about measuring, getting numbers to predict if something is or will be profitable or not on TV. In question is not just the rating system but the whole TV business as we know it, and particular that is true for scripted TV shows.
How do TV companies make money? The big business, the big money for TV so far has been in advertising, meaning selling air time to other companies to advertise for their products. You can get somewhat different opinions on how important DVD sales are, but when looking at these numbers for The Simpsons, selling advertising is by far the bigger number, besides what is called merchandising (excluding DVD sales)… Now merchandising besides DVD sales is big business for some, but for many TV series it’s not bringing as much as for such shows as The Simpsons. For many popular procedural shows, mostly crime and medical dramas, the kind of merchandising a show like The Simpsons can do, is not possible. I mean, for example doubt that a figure set of CSI characters would sell that well.
For live event shows (sport events, show events like Amazing Race, American Idol, reality shows) the big money is still in advertising, what makes them TV companies’ darlings. Let’s simply say, revenue for live event shows is more predictable and clear, it’s still mostly advertising and maybe some merchandising. Measuring viewer numbers (and it’s not so hard to include internet live-stream viewers in these numbers) and buzz on social media sites is a rather good indicator for the success of these kind of shows. The old measurements and TV business models work still quite fine in this sector.
With scripted TV series things are a tad more complicate by now, there is a mix of things bringing revenue, and the mix can be quite different for different series. While one show might bring a little less in advertising revenue during first run, it might be a big selling hit in syndication, national or international, or it could do even better in DVD sales, or as competition to DVD sales nowadays online streaming and downloading (Hulu, Netflix, Itunes). Predicting that wasn’t easy before the social media boom, first run ratings aren’t always a good measure to predict it. Social media might now help with numbers for this, but so far it is rather unresearched how reliable any numbers drawn from social media buzz will be, can be, if they can tell more about potential for DVD sales, online streaming/downloads and merchandising than good old Nielsen Rating did.
Not to mention, profit begins only when your revenue is (on the long run) higher than the costs for production. So shows with small budgets can even with small audience and smaller sales make some money, while for big budget shows it has to be big audience, big sale. Remember, all things are relative.
Nielsen are changing their system, they are already running tests in collaboration with Twitter, and from Fall 2013 numbers for the “Nielsen Twitter TV Rating” will be available. It’s though only an enhancement of the classical TV viewer ratings, because it still is focused on live airing.
Numbers for DVD sales, online streaming and download are available, but there is no simple way to integrate it into the Nielsen Rating, TV ratings, quite simple because of different time frames – but that doesn’t mean those numbers aren’t looked at by those making decisions about picking up, reneweing or cancelling TV shows. Just because some TV critics and fandoms still make such a buzz about Nielsen Ratings it’s not like business takes only those ratings and only rating numbers into account.
TV business is changing, and we might see scripted TV shows go a very different way in the future than live TV events. One interesting question will be, if internet based series will be able to make enough revenue for example to attract more producers to this possibility and one day make classic TV a second choice as distribution channel for audio-visual fictional story telling of whatever kind. Will for example pay-per-view or video-on-demand be able to bring the money to refinance production costs and then even bring in profit? So far classical TV (broadcast and cable) is still bringing in the bigger deal, and that still means mostly revenue based on advertising, but the share of other distribution channels is increasing.
Nielsen TV Ratings are far from outdated for measuring impact on TV, but the future for the kind of story telling scripted TV series and TV movies present might be not on TV anymore.
@HappyEndings wrote:
You know what makes me mad is that the cater to everyone who is 49 and younger, what about older people we should count in fact there is more senior citizens that watch tv then the younger generation 👿
Well, marketing business has as much to do with myth as with numbers, and sometimes one can wonder if the myths are not more important. There is the idea, that younger people are more impressible for advertising, with age we become more stuck in habits and less open to change and buy new stuff 😉 So senior citizens might watch even more TV but they are still seen as less worth for selling advertising. The thing in TV business is not the cheer number here but what merit whoever is giving the money expect it to have.
There is hope, that even that might change though. see here
Can’t point it out often enough: the media buzz about Nielsen TV Ratings doesn’t equal (anymore) how business people look at the numbers. And: the free, public available numbers we have here are just a fraction of what Nielsen is putting together.
I know I won’t be able to talk anyone here ever out of paying attention to these public ratings numbers. Not saying they indicate nothing, only that what they mean is often overrated in many places.
So grab your towl, drink a cup of Earl Grey and … Don’t Panic! 😎
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