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# Television Ratings

Suppose your favorite television program has just been cancelled because of bad ratings. In the world of television ratings, the number of people watching a show is the important factor, not the intrinsic, qualitative value of the show. So who is rating television shows, and how is it done?

Nielsen Media Research was founded in 1923 to measure the number of people listening to radio programs. Early on, the number of people listening to the radio was low enough to actually count. However, with the advent of television, cable, satellite, and digital television, the number of viewers has greatly increased. In fact, counting the number of viewers of a television show is impossible, so the Nielsen company has devised a way to estimate the number of viewers.

## How Ratings Are Determined

Nielsen Media Research measures a sample of television viewers to determine when and what they are watching. Nielsen uses a sample of more than 5 thousand households, which is over 13 thousand people. With close to 100 million households in the United States, one might wonder whether the sample of 5,000 households is large enough to provide a cross-section of the whole market. The company illustrates the sampling procedure with this example:

You don't need to eat an entire pot of vegetable soup to know what kind of soup it is. A cup of soup is more than adequate to represent what is in the pot. If, however, you don't stir the soup to make sure that all of the various ingredients have a good chance of ending up in the cup, you might just pour a cup of vegetable broth. Stirring the soup is a way to make sure that the sample you draw represents all the different parts of what is in the pot.

A truly random list of households will statistically provide a variety of demographic groups. Using demographic information from the U.S. Census Bureau, Nielsen Media Research is able to compare characteristics of the entire population with the characteristics of the sample population. Their findings indicate that the two samples compare favorably. In addition, Nielsen Media Research occasionally completes special tests in which thousands of randomly selected telephone numbers are called, and the people are asked if their televisions are on and who is watching. This information provides a check on television usage and viewing.

The Nielsen company provides information on the amount of television set usage, the programs viewed, the commercials watched, and the people watching. To measure television set usage in sample homes, the Nielsen company installs meters to televisions which automatically log when the sets are on and to which programs the sets are tuned. To measure which programs are being watched, the Nielsen company collects network and local programming information in order to know what programs are being shown on any given television set in a sample home. Each commercial aired is marked with an invisible "fingerprint" that enables trackers to determine when and where commercials are aired. Combining this information with the programming information allows trackers to note which commercials aired during which television programs. The Nielsen company provides each sample home with what is known as a "people meter" in addition to the television meter. The people meter is a box with a button for each member of the household and one for visitors. When a viewer begins watching television, he or she presses a button that logs in the television usage. When the program is completed, the viewer again presses the button to register the end the viewing time.

In addition to measuring national network programs, Nielson Media Research also measures local viewership. The Nielsen company uses program diaries to measure the local audiences. These diaries are records of who in the sample group watches what programs and what channels during a one-week period. Diaries are collected in 210 television markets. In addition, in the 48 largest television markets, there is a sample of homes with set meters that record when the television is on and the channel to which it is tuned. Homes with set meters installed on television sets do not have people meters installed.

## Using Ratings

This information regarding what television shows are being watched and by whom is used by two industries: marketing companies and television production companies. Marketing companies use the information to determine the demographic characterization of the viewers. The information generates questions such as: Are men or women watching the show? Is the audience mainly older adults or teenagers? Does this show appeal to minorities?

Marketing companies want this information in order to produce commercials that will appeal to the group that is watching a given program. The television production companies cannot pay more for a program than they earn from selling advertising during the program. The larger the audience of a particular program, the more the commercial time during that program is worth. The basic formula for commercial time is a negotiated rate per thousand viewers, multiplied by the Nielsen audience estimate. Nielsen ratings are also used by public broadcasting stations, enabling them to learn who their audience is and, therefore, to make more informed programming decisions.

All that is left to understand, is who are the Nielsen families and how are they selected? The sample population includes homes in all fifty states in cities, towns, suburbs, and rural areas. Some households include renters; others own their home. These households may or may not include children. Various ethnic and income groups are represented. Overall, the sample population is very similar to the true population of the United States. The selection of the sample families is random; therefore it is not possible to increase one's chances. In fact, including all those who ask to be included would skew the sample, making it nonrepresentative of the population at large. Only by chance can a household become a member of the Nielsen family.