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Week In Review: The MRC Shuts Down Nielsen, Locast Shuts Down

1. The MRC Shuts Down Nielsen

After months of taking hits from various network executives and the Video Advertising Bureau (VAB) about underreporting viewing during the pandemic, the Media Ratings Council (MRC) stripped Nielsen of its national TV ratings accreditation and denied their request for a hiatus to get their act together.

The move got a lot of press and a lot of predictions that Nielsen was in its death throes. And of course the stock is tanking.

Why It Matters

While there is a whole lot to unpack here, none of it is all that unexpected or surprising.

No one has ever believed that Nielsen’s ratings were all that accurate. 

But they were accurate enough and as long as they showed that viewing was high in a way that allowed the networks to charge zillions for national and local TV spots, the networks were not going to complain. Publicly, anyway.

That said, viewing habits changed dramatically over the past ten years, and there’s a book to be written there about why they did not manage to get anything workable off the ground given that streaming has been around for over ten years at this point.

Probable culprits include the networks, who liked being about to tell advertisers that all those missing linear viewers were actually watching on streaming and did not want the truth to come out, plus ad-free streamers like Netflix and Amazon who dominated the early years of streaming and who were actively against any sort of ratings, plus tech stacks from the various players that weren’t fully up to speed and were not designed to work together.

That all came to a head when the pandemic did not produce the jump in viewing that the networks were banking on, which in turn pissed off advertisers and Nielsen, caught in the middle, wasn’t ready to provide measurement for streaming in a way that made anyone happy.

That said, let’s be clear that this is mostly theater.

There really isn’t a universally accepted alternative to Nielsen. Or at least one that the entire industry is suddenly going to snap their fingers and say “Yes! Let’s use that one instead!”

So if anything, this is just a way to force Nielsen to try and speed up its modernization program as it incorporates things like ACR data and set top box data into the mix. 

The problem though is that Nielsen can’t solve the main problem the TV networks have with it, which is that their ratings are indeed going down as fewer people watch traditional linear TV.  So while yes, Nielsen can do a better job of providing TV ratings that reflect the way people watch TV in 2021, they’re not going to be able to make those ratings look like 1995. 

And that’s a problem the networks are going to have to come to terms with. They can try and create their own ratings platforms and all that, but at the end of the day, if those platforms are accurate, I suspect the news still won’t be what they want to hear.

What You Need To Do About It

If you’re Nielsen, it would seem your best bet is partnerships. Rather than trying to go it alone, work with all the iSpots and Comscores and Inscapes and Comcasts and everyone else who already has a working solution for measuring streaming viewers.

If you’re a network, accept that linear ratings are going down and concentrate on finding ways to reach viewers across both linear and streaming. Traditional pay TV is shrinking, but it’s shrinking slowly and I suspect you have a good five to ten years of chasing audiences across both platforms.

If you’re the MRC or VAB, this is your opportunity to make a name for yourself and help the industry find a path forward before the whole measurement thing erases all the gains TV has made in terms of advertiser perceptions.

2. Locast Shuts Down

Early Thursday morning I received an email from Locast informing me that they were pulling the plug. “We are suspending operations, effective immediately” was the exact language.

The decision was made in light of a recent court decision against Locast in a suit filed by ABC, CBS, Fox, and NBC.

Why It Matters

Locast was trying to redo Aereo by using a loophole: they didn’t actually charge money, so they weren’t actually reselling the signals. They were just asking for donations.

This was in many ways just another variation on Aereo’s “But I didn’t eat a cookie, I ate two cookies, Mom!” argument wherein they claimed they weren’t actually selling you the broadcast signal, but rather, they were leasing you an antenna.

While Locast’s non-profit play was a bit more clever, no one really expected the courts to let them get away with it.

So the court found its own loophole, ruling that Locast, which frequently interrupted free broadcasts to ask for donations, was not really operating like a nonprofit, but was actually making quite a bit of money–far more money than it needed to run its operations.

Locast’s initial reaction was “Okay, so we won’t charge people then or even ask them for money.” But after a few day’s reflection they likely realized that they’d need that donation money to do things like keep the lights on and pay employee salaries.

So they shut down.

This surprised no one given the four networks’ ability to pursue lawsuits for decades to come if necessary, given the likelihood that an unrepentant Locast would continue to be a thorn in their sides.

And so another brief era of free, internet-delivered pay TV comes to an end.

What You Need To Do About It

If you’re the U.S. government, the FCC in particular, you need to relook at all those severely outdated regulations around broadcast TV with the realization that broadcast is an outdated technology that’s going to slowly fade away and the way to enforce any sort of fairness doctrine is to acknowledge that streaming will be the way people watch TV going forward and pass regulations that allow you to get ahead of the game. 

If you’re ABC, CBS, Fox, and NBC, realize that you’re only going to be able to ride that particular retrans gravy train for so long. Traditional cable numbers are dropping and at some point in the next five to ten years it will no longer be profitable for the MVPDs to offer any sort of old school pay TV package. Which is not to say you can’t sell rights to your local broadcasts to one of the Flixes or FASTs, but the Flix is likely to be the one you own and the FASTs may not be willing to pay you the same mega billions the MVPDs did. Just something else to keep you up at night..  

If you’re Locast, you had a good run, you helped improve the interface for linear broadcast TV online, only now maybe it’s time to sell that technology and know-how to someone who is thinking that broadcast is unlikely to go away and there’s a market of people who would happily pay to have local broadcast incorporated into their streaming experience.

Pay being the operative word here as the broadcasters will indeed have to be paid.