Media

CBS in battle with Nielsen as TV viewership habits change


CBS, the most-watched US television network, is waging a war with Nielsen, the company whose ratings underpin most of the country’s $70bn TV advertising market, over payment terms that have left the broadcaster out of contract.

The stalemate between the two companies, that led to Nielsen cutting off the TV group’s data as of December 31, comes as private equity groups including Madison Dearborn are exploring a bid for all or part of the 95-year-old market research company. 

Nielsen has been the gold standard for TV ratings for decades, but as online streaming has brought viewership away from the set box TV, media companies claim that it has not kept pace with changing viewer habits. With more people watching programmes online, media owners have seen their viewing figures drop for years — causing executives from groups such as Viacom and NBCUniversal to claim Nielsen’s ratings were “useless”. 

CBS said in a statement on Thursday that Nielsen “continues to use their market power to bundle disparate services and raise prices for services that don’t sufficiently address ongoing changes in the industry”. 

It added: “As a result, we are currently at a contractual impasse.”

The impasse in negotiations with CBS has concerned advertisers, as Nielsen’s audience ratings are used to set advertising prices. WPP-owned advertising agency GroupM said on Friday that it “would like the two parties to come to an agreement for the benefit of the industry”.

Nielsen said: “We have an open negotiation with CBS and expect to arrive at a mutually beneficial agreement.” 

Despite the expiration of CBS’s contract, Nielsen has recently struck deals with three other large clients in the past several weeks, according to people briefed on the matter.

Analysts said that CBS would inevitably need to make a deal with Nielsen. The situation was “highly unlikely to end with anything other than a renewal in the next couple of weeks”, said Brian Wieser, analyst at Pivotal Research. “Media owners who wish to sell their advertising need to work with Nielsen or otherwise risk losing meaningful revenue while their stations go unmeasured by Nielsen.”

Todd Juenger, an analyst with AllianceBernstein, said: “There is near 0% chance CBS fails to renew at terms consistent with history”. 

He added: “CBS needs Nielsen’s help more than ever. One of CBS’s most important needs is getting credit for their audiences, wherever they are.”

However, television executives say that this battle has been brewing for years, as the industry has been frustrated by a slowness to adapt to the sea-change in how people watch their shows. 

“A lot of people in the industry are quietly cheering on CBS,” said one senior executive at a television network. “No one likes dealing with Nielsen. CBS is the public manifestation of an industry-wide set of frustrations with Nielsen about the data they provide and the prices they charge for it.” 

Nielsen in September said it would expand a strategic review to explore the potential sale of the entire company, after it came under pressure from activist hedge fund investor Elliott Management, which is unsatisfied with the way it has performed. Nielsen last summer slashed its financial forecasts and in November brought in David Kenny as chief executive — its first new chief in two decades. 

At least six large buyout groups have hired advisers for potential bids for Nielsen, setting the stage for a takeover battle of the company, the Financial Times reported in November.



READ SOURCE

This website uses cookies. By continuing to use this site, you accept our use of cookies.