WarnerMedia Busts Out Of The Nielsen Corral, vMVPDS Still On The Upswing

1. WarnerMedia Busts Out Of The Nielsen Corral

WarnerMedia just announced that it would start working with measurement partners Comscore, iSpot and VideoAmp as it looks to expand its measurement stable beyond Nielsen. 

Warner Media, which is set to join Discovery post-merger,  plans to use these alternative currencies in the upcoming (May 2022) upfronts to measure reach and frequency across linear, on demand, digital and streaming.

Why It Matters

The Warner deal represents yet another crack in the Great Wall of Nielsen. ViacomCBS is one step ahead of them and NBCU is one step behind—they are expected to announce their new measurement partner line-up shortly.

This is something that’s been a long time coming, but at its heart it boils down to the notion that while having a single provider reduces complexity, it also reduces innovation. Combine that with the notion that the massive changes in viewing habits—changes that are not going to disappear any time soon—call for a different style of measurement and you have your rationale.

The fact that advertisers have been pushing for more advanced measurement was a key factor too, and why the ability to determine advertising effectiveness, aka business outcomes, is a key piece of Warner’s future plans too.

The other macro trend reflected here is that advertisers have become very used to getting deeply granular metrics from their mobile and digital display advertising and they now want to see those types of metrics used for TV, a not-unreasonable request given that it is now feasible to do so.

This is not to say that Nielsen is on its last legs. Far from it—there are too many brands who still want Nielsen data and the company has been working to modernize its offering by bringing in set top box and ACR data too.

That said, networks have realized that the ability to offer measurement from a range of providers gives them more flexibility and, more importantly, adds additional checks and balances.

For instance, the ACR data that Nielsen makes use of comes from Roku’s Gracenote unit (Gracenote was formerly owned by Nielsen.) Comscore, iSpot and VideoAmp, OTOH, make use of currency-grade ACR data from VIZIO. (iSpot also uses ACR data from LG Ads Solutions, as per a deal announced last month.)

(You can read all about the wonders of ACR data and how it is revolutionizing TV measurement in a new special report from TVREV due out January 17th.)

If there are any clouds on the horizon, it is that there are still plenty of advertisers who see TV as being nothing more than a reach vehicle to get their message in front of as many people as possible, and they’re not quite seeing the value of better measurement just yet.

This will change soon enough as the various network groups put these new systems into place and as case studies become available showing how even big mass market national advertisers are able to use advanced metrics and targeting to boost sales and awareness.

Which brings up one final point: for many years, networks avoided any changes to measurement systems because they were afraid more advanced (read: more accurate) metrics would reveal that they actually had far fewer viewers than Nielsen said they did. Now that they are all in the streaming game and realizing that the sky is not about to fall on them, they’ve become far more open to revamping TV measurement, which is only going to benefit the industry in the long run.

What You Need To Do About It

If you are an advertiser, you want to take advantage of all these new measurement systems, play around with them, learn as much as you can, understand what you can learn from understanding business outcomes, et al, with the end goal of understanding how all this newfangled measurement can make your ads and your ad buys more effective.

Because if you don’t, your competitors certainly will.

If you are a network that isn’t actively looking to expand your measurement repertoire, think again. For starters, if you don’t do this, you are most definitely going to get left behind. More than that though, improved metrics that show the real value of your audience means you can start charging more for that advertising and that you can sell it on a cross-platform (linear and streaming) basis. 

If you are an ad agency, there’s going to be a lot of confusion with your clients about how all these new measurement systems work and why they’re even necessary. Not because it’s confusing but because it is new. The more you can hold their hands and explain why it’s a good thing, the more valuable you’ll become.

2. vMVPDS Still On The Upswing

It’s easy to spin the news about vMVPD subscriptions as a negative: they all gained fewer subscribers in Q4 2021 than they did in Q4 2020 (1 million vs 1.7 million).

But that would be missing the forest for the trees. The fact that they are still gaining subscribers at all during a period where their terrestrial competitors are all shedding subscribers at a rapid pace is certainly notable, and a positive development for them overall.

Why It Matters

The data I am referring to comes from a MoffettNathanson report which now puts the total vMVPD subscriber base at 14.2 million. 

Big winners were Hulu (up 300K), Fubo (up 263K) and YouTube (up 225K).

While MoffettNathanson blamed the failure to beat last year’s numbers on rising prices—noting that the initial low prices attracted price-sensitive viewers who were then turned off by the price hikes—I have a different POV.

vMVPDs are a nicotine patch for viewers looking to ditch traditional cable. They’re pretty sure they want to, but can’t quite bring themselves to totally cut the cord. As such, vMVPDs offer a happy medium, allowing them to tell their friends that they have indeed “cut the cord” without actually, you know, doing so.

Which is why I suspect that many of the initial converts were not so much looking to save money as they were looking to get rid of cable without actually getting rid of cable. And that more of them did so while the pandemic was still going strong and so having as much TV to watch as possible was more important then than it was this year. (And then in walks Omicron…but I digress.)

In terms of pricing, the vMVPDs have indeed been upping their prices pretty steadily for a while now but they still represent a significant savings over traditional cable—if nothing else, the savings from not having to pay upwards of $10/month for each set top box in the house is pretty significant. Factor in the additional value of not having to locate the TV remote to switch inputs every time you want to watch something on streaming and you have a pretty solid value proposition off the bat.

Now in the long-term, the vMVPDs will have to adapt to a changing industry, however that plays out. But in the short term,  the fact that they are continuing to grow at a time when pay TV viewership overall is falling by over 5% each quarter is something pretty notable.

What You Need To Do About It

If you’re Hulu, take a bow: combining your latest price increase with free access to Disney+ and ESPN+ was a clever move and actually made it seem like the viewer was coming out ahead.

If you’re Fubo, congrats on the merger with Molotov. We are curious to see what your new European venture will look like.

If you are any of the vMVPDs, just remember that your viewers are likely thinking they will eventually do away with pay TV altogether and so you need to give them a reason to stay subscribed. That might mean continuing to strike deals with the various RSNs (Sinclair/Ballys in particular) given that maintaining access to their favorite RSN is a key reason many viewers are reluctant to give up pay TV altogether, and they’d be happy to pay dearly for access.