Although Netflix’s audience is large (and growing), it’s notoriously hard to measure.
Nielsen hopes to remove some of the difficulty gauging audience viewership in ad-free environments like Netflix with its launch Wednesday of a syndicated measurement service called Nielsen Subscription Video On Demand (SVOD) Content Ratings.
Eight networks and studios, including A&E, Disney-ABC, Lionsgate, NBCUniversal and Warner Bros., are beta testing the tool, which will be released generally in January.
For now, the service only works with Netflix, which Nielsen says accounts for more than 51% of TV household subscriptions. Nielsen hopes to soon expand SVOD Content Ratings to new and existing services like Amazon Prime and Hulu.
But for now, it’s all about Netfllix – whose traction continues to grow. During its Q3 earnings call Monday, Netflix revealed it had surpassed analyst expectations by adding 5.3 million subscribers as it prepares to invest $7 billion to $8 billion on original video in 2018.
But despite its popularity, Netflix has a lot of viewers who aren’t being measured.
Previously, Nielsen tried to work around the Netflix blindspot by having studios place audio watermarks in their content, which it matched against its then 40,000-person metered audience.
But that process was piecemeal and exclusively for clients who asked for it, said Megan Clarken, president of Nielsen’s Watch business.
“We’re now making the measurement of SVOD services syndicated to subscribers, so they see not just how their own content is performing, but how it’s performing comparable to other platforms,” she added.
SVOD Content Ratings provides viewer stats from Netflix and, eventually, other subscription video portals, that are comparable to ratings in video channels like linear TV and ad-supported video on demand.
The service also expands measurement for content studios and networks. In the past, Lionsgate might have been able to track the performance of its own Netflix show, “Orange Is The New Black,” but now other networks and studios can access that information more easily through syndicated ratings.
“[Clients are] now getting a rating for those audiences on SVOD around segmentation and frequency, season, program and episode level,” Clarken said.
Nielsen fielded demand from networks and publishers who wanted more viewership data from SVOD services.
“There are very strategic decisions that need to be made to understand the trade-off between licensed or subscription-based revenue you might get from an SVOD platform versus holding [content] back a little bit longer to [monetize] through advertising,” Clarken said.
“Up until now, those decisions were made blind by cobbling together data from different sources,” she added.
Increasingly, content owners debate whether to monetize content through subscriptions or ads – which has caused more convergence in metrics.
“What you saw with our Hulu and YouTube TV deal was digital-first companies leaning into a linear advertising model by competing with and against others for advertising dollars based on C3 and C7 currency ratings,” Clarken said.
Nielsen claims it has spent years managing watermarked assets from content owners and now has a database of 12,000 content assets, up from 1,000 in 2014.
It built its SVOD syndicated measurement using Nielsen’s Total Audience framework, which helped Nielsen further expand its asset database and audience ratings, according to Clarken.
This post was syndicated from Ad Exchanger.