Who's watching TV? Stations turn to new measurement system

Few brands are more recognizable than The Nielsen Co. TV ratings.

But the longtime system for measuring television viewership has its shortcomings, especially in smaller markets like Reno, where two local stations are now using a product from upstart Rentrak Corp.

Station executives in Reno say they're getting more accurate and dependable data about viewership as they make the change.

Rentrak itself is not exactly new. The 35-year-old Portland, Ore., company is as well known in the video-on-demand and movie box office tracking world as Nielsen is in the TV realm.

But Rentrak recently moved into the small-screen market with StationView Essentials, its viewership measurement system that rivals Nielsen, which has had a stranglehold on the market.

Not anymore. Rentrak now boasts deals with 200 TV stations, including some in the nation's top 20 markets such as Dallas, according to Cory Sher, director of business development for StationView Essentials in Portland.

The bulk of Rentrak's customers are in smaller markets such as Reno. Its clients in the region include KRNV, the city's NBC affiliate, and KOLO, Reno's ABC affiliate, as well as KSNV, the NBC station in Las Vegas.

Viewership numbers are like money to TV stations, which use them to determine what they charge advertisers and help fine tune programming.

Data accuracy is vital because it directly affects a station's bottom line. A drop off or fluctuation in audience size can result in lower ad rates and lower revenue.

Market leader Nielsen collects its data through viewing diaries filled out by a small, select sample of local TV watchers.

The data is known to be volatile. TV stations, like Fox affiliate WSVN in Miami, have even sued Nielsen saying its data erroneously showed huge dips in viewership. Diaries can be unreliable because people are unreliable; they sometimes forget to fill out the diaries in real-time and then forget what they watched.

(In larger markets, Nielsen sometimes uses a combination of diaries and meters attached to TVs that more accurately track viewing as it occurs, but in second-tier markets like Reno Nielsen relies solely on viewer-submitted data. The company is also reportedly working on new technology.)

"With Nielsen, we'd see some violent swings," says Matt McConico, news director with KRNV. "In one book, we'd be number one, next book we would be third. It didn't look to be trends you could believe in."

A "book" is one of four, four-week periods of the year better known by viewers as sweeps when Nielsen viewers record their diaries. The book system creates another drawback: TV stations only get information on their audience's viewing habits for those 16 weeks, less than a third of the year.

Rentrak, on the other hand, gathers its data 365 days of the year and directly from TV set-top boxes through deals with cable operator Charter Communications, AT&T and its Uverse offering and satellite provider Dish Network.

As a result, Rentrak surveys a much bigger sample than Nielsen.

"With Rentrak, we get about 30,000 households," says KRNV's McConico. "With Nielsen we get about 600."

McConico defends Nielsen, saying the stalwart carefully chooses the sample of households it monitors to ensure they are representative of the market being measured while Rentrak's bigger sample is random. Still, KRNV plans to drop Nielsen once its contract with the New York City company runs out in a few months.

KOLO plans to use both Rentrak and Nielsen, in part because many national advertisers still use Nielsen ratings to evaluate ad buys.

"Rentrak works better with people that are mom-and-pop shops, local clients, who don't use an agency," says Matt Eldredge, general manager at KOLO. "They buy into the methodology more than some of the agencies. It's difficult to transition the agencies to new methodology, although a few have endorsed the research."

Rentrak data is more reliable, says Eldredge, and KOLO is using it to make more timely programming decisions. But the station isn't giving up Nielsen yet.

"Nielsen is still the currency of the day," says Eldredge.

For its part, Rentrak says it isn't trying to upend Nielsen, only provide a complementary service.

The company is working hard to both expand its influence in ad agencies and to broker data-collecting deals with more providers like, presumably, satellite leader DirecTV.

"We're in talks with all the operators," says Rentrak's Sher.

Rentrak also enhances its data by "overlaying" other data on it that gives stations more detailed information on its audience, says Sher. The company has deals with Polk & Co. for automotive data, and Experian Simmons and MasterCard on consumer buying habits and trends.

"We're not encouraging them to drop Nielsen," says Sher. "There's room for more than one currency and the agencies and stations get that.