The Future of TV Measurement Data

The following is an excerpt from our recent (free) report Getting Granular: Why ACR Data Is Winning The TV Measurement Game

Talk to ad agencies right now and many will insist that any post- Nielsen measurement system needs to include both ACR and set-top-box data, along with some sort of panel-like system for collecting “person level data.”

That’s the right answer for 2022, but probably not for much longer.

Set Top Box Data vs ACR Data

Yes, set top box data is somewhat useful today. But given how fast the numbers are falling off, it would be foolish for anyone to bet their future on it.

—Ad agency executive

While the number of set top boxes is shrinking even in homes with pay TV subscriptions, the data they collect is still held in high esteem in the industry.

Some of that is familiarity—set top box data has been around for a long time and so many ad buyers have a certain level of comfort with it.

This is not unreasonable. For many years there was a strong argument to be made that set top box data was a good check on ACR data and a way to understand household viewing patterns.

The argument was that set top box data measured viewing on every TV in the house, whereas ACR data only pulled from a single smart TV, which may or may not be the main TV in the house. Proponents of set top box data argued that this gave them better insight into the viewing behavior of the entire household as they were pulling from more data points per household.

That said, there were always issues.

Set top boxes, especially the older ones, are notorious for continuing to record viewing for an hour or so after the viewer has turned off the TV. (Because the set top box operates independently of the TV set, it’s possible to turn off the TV set without actually turning off the set top box. This glitch is common enough that third parties using set top box data generally ignore the last hour of viewing.)

Those older set top boxes also don’t do a very good job of collecting data in a timely manner at a time when advertisers increasingly want numbers in close to real time.

And while many MVPDs have state-of-the-art digital set top boxes, a number of their customers still cling to their original boxes. That’s due to the old “if it ain’t broke why fix it?” attitude—if the older box still works and customers are comfortable with it, they don’t see a reason to schedule an appointment to have a tech come to their house to install a new box—even a free new box— whose features they’ll then have to learn from scratch and may not actually like as much.

(Technophobia is real, especially in the TV industry—remember that even in their heyday, only slightly over half of viewers took the MVPDs up on their offer of a set top box with built-in DVR.)

There’s also the hassle of watching on a set top box in a world where most pay TV viewers also watch streaming services and the impact that has on data collection.

While some MVPDs now give consumers access to Netflix and a few other streaming services via the cable box, that viewing is often not trackable.

And that option is usually only available for consumers who have the latest version of the MVPD set top box.

Other viewers, or those who just want to watch one of the many streaming services not available via the MVPD’s set top box have to do the “switch input shuffle” and watch on their smart TV’s native OS or a streaming device (dongle.)

Which means that the streaming viewing done by that household is not included in the set top box data.

Sunsetting The Set Top Box

There’s a bigger issue with set top boxes though: they are going the way of the 8-Track and the VHS player.

An October 2021 Leichtman study found that only 37% of all TV sets in use have a traditional pay-TV providers’ set-top box, down from 58% in 2016.

That’s a fairly dramatic drop-off over a five year period. It may also be proof of something we heard anecdotally while researching this report: many people report that consumers have gotten clever and realized that MVPDs were charging them as much as $15 per month for each individual set top box. By designating one TV set for “cable” and the others for streaming, they are able to save a good amount of money each month. And that behavior, of course, obviates the claim that set top boxes can measure whole household viewing.

The other problem with set top boxes is that MVPDs just aren’t all that into them anymore and are looking to move to apps and ACR-equipped streaming devices.

One reason is that they are expensive to maintain and often hard to update. They require employing technicians who must be dispatched to customer’s homes and when those “cable guys” don’t show up on time, consumers take their anger out on the MVPD.

Even when there is no cable guy involved, many of the boxes that are in use feature antiquated hardware and consumers are skeptical that the updated replacement box will be any better, which then pushes them to either cut the cord or switch to a vMVPD, which many consumers (and tech journalists) equate with “cutting the cord.”.

The App Solution

For both consumers and MVPDs, there’s also a simple solution to set top boxes: MVPD apps that live on OTT streaming devices.

Apps are easier for customers, don’t need to be physically installed, are easily updated and (best of all) provide a superior consumer experience—no more switching inputs to go from linear to streaming and back again.

Many MVPDs have already started to push out their own vMVPD- like apps, while Comcast, the largest cable-based MVPD, has gone even farther. In addition to apps, it is supplying customers with its own Flex-branded streaming device, and has recently announced it will begin selling its own line of smart TVs. (Both Flex and the smart TVs will make use of Comcast’s well regarded X1 operating system.)

The Overlap Issue

As noted earlier, almost all TVs sold in the U.S. these days are smart TVs. And since smart TVs measure everything that is on the glass, they also measure whatever the viewer is watching via the set top box. This means measurement companies need to de-duplicate their results by understanding when the set top box data and ACR data are reporting on the same television viewing the same shows.

Pretty soon, almost all set top box viewing will be done on a smart TV and thus set top boxes won’t have any unique data.

Or will they?

When we spoke to ad agency executives about this, they sounded several notes of caution.

Provided all the sets are hooked up to a cable box, which is no longer a given, set top boxes can measure all of the viewing in a multi-TV household, giving insight into what everyone in the household is watching and which ads they’ve been exposed to.

Agency executives also pointed out that not every smart TV household has opted in to having their data collected. (The opted- in figure for the major OEMs is around 75% to 80%) They felt that that number could grow however, as privacy rules became more widespread, thus increasing awareness of how much data was being collected and what was being done with it.

While it should have the opposite effect--making people feel better about their privacy—what these laws tend to do is they make people aware of how much of their data is being collected and what’s being done with it. And then they see an article about how to stop their TV OEM from collecting their data and they’re out. It’s not a problem yet, but it is something to keep an eye on.

—Media agency executive.

No Longer A Representative Sample

The biggest concern we heard though was that fairly soon the only people left with set top boxes were going to be notably older and less affluent than the general population (not to mention less tech savvy.) As a result, the rapidly shrinking pool of set top box data would no longer be a valid reflection of the population in general and thus not have any value as a check on ACR data.

In five years from now, you’re going to have a narrow band of brands who want to advertise to people who still have set top boxes. Or base their ad spending decisions on the viewing data those people are providing.

—Senior network executive.

Download the full TVREV report to learn more about the future of ACR and TV measurement