Ratings giant Nielsen has devised a way to get a grip, albeit a restricted one, on measuring viewership for streaming shows online — providing a glimpse into the performance of shows on Netflix and Amazon.
The Nielsen company said it will begin tracking viewership of online video subscription services, including Netflix and Amazon, as early as next month.
Programs tracked would only include those that Nielsen's clients, which largely consists of traditional TV networks and studios, submit for analysis. Meaning one of Hollywood's biggest secrets -- viewership numbers for Netflix and Amazon original series such as "Orange Is the New Black" and "Transparent," respectively — will remain a mystery.
"That's the No. 1 misunderstood point that is out there," Brian Fuhrer, Nielsen senior vice president, told the Times. "A client has to participate with us. For us to finally tell you how 'House of Cards' is doing, Netflix would have to say to us, 'Here you go, add this to the library and report on it.'"
Television networks have long complained that Nielsen hasn't done an adequate job in measuring rising online viewing. But the company has faced several obstacles, including lack of cooperation from Netflix and Amazon.
The rise in use of subscription streaming services likely could be responsible for the dramatic audience declines for traditional television networks, Bernstein & Co. media analyst Todd Juenger said Wednesday.
Nielsen estimates that 40% of TV households now subscribe to at least one subscription video-on-demand service. And those households, Juenger noted in a research report, watch 20% less TV after they sign up for video-on-demand.
"That fact, in and of itself, ought to be enough to shock the industry into attention," Juenger wrote. Recent data points "seem to confirm our fears that SVOD is directly cannibalizing ad-supported TV consumption."
Fuhrer said the new viewership-tracking method was born out of trying help crack the puzzle.
"Our clients have a lot of detail about live viewing, DVR viewing, and [video on demand] viewing — and they really understand those relationships," Fuhrer said. "Once it goes beyond that to other providers, they really don't understand the life cylce of their program. That's what we're trying to do here. We're leveraging technology we already have but building it out so it's a little more powerful."
The streaming sites, so far, have maintained an upper hand when negotiating syndication renewals, as only they are privy to how much a show or episode is viewed. Netflix and Amazon declined to comment on Nielsen's plan, which was first reported by the Wall Street Journal.
Nielsen will track programs' streaming viewership by analyzing audio elements transmitted from its meter boxes. The company is already processing some programs' information in trial mode, with plans to build up the content library in the next couple of months.
While the move from Nielsen helps tread ground on the new frontier, there are some limitations.
Tracking on mobile devices, such as tablets and phones, won't yet be part of the measurements, as the technology doesn't support it.
Fuhrer stressed everything has to start somewhere.
"Out clients are trying to make some really difficult decisions about how to administrate their programs," he said. "I don't know so much about how it will change the power dynamic, but it makes our clients more informed and paints them a better picture so they can make better decisions."
Times staff writer Meg James contributed to this report.