How will Nielsen measure ratings in the future?
As streaming services grow in popularity, the ratings giant is funding startups with new ideas on how to track viewership.
In the world of home entertainment, the humble living room has seen dramatic shifts over the last century. From a radio on a pedestal to a television on the wall, advancements in technology have given us new ways to experience programs like never before. As anyone with a smartphone in their pocket will tell you, the latest dramatic episode in the story of entertainment now happens outside of four walls and a sofa. Tablets, laptops, video streaming boxes and other devices now hold court alongside television and radio.
While this latest shift is great for consumers, it presents something of a challenge for those interested in gauging who is watching what, where and how. New York City-based Nielsen, whose ratings system has become synonymous with the world of entertainment, has weathered this problem before, having successfully made the leap from radio to television decades ago. The sheer scale of content distribution this time around, in particular from streaming networks like Netflix and Amazon, presents an unprecedented challenge.
In an effort to deliver metrics on everything we consume outside of the cable box, Nielsen is tapping into one of the world's top-rated startup ecosystems in Israel. In 2013, the company launched Nielsen Innovate in Tel Aviv with the idea to foster and fund the next big ideas in consumer behavior, data analytics and new media.
"Israel is one of the most unique startup environments in the world," a representative for the company told From The Grapevine. The company says what drew them to the country was its strong cultural focus on STEM education and advanced degrees, investment in its technology sector, and ambitious people who are "open to risk and taking chances."
Nielsen Innovate is supporting startups focused on the next generation of data analytics, including streaming video on mobile. (Photo: 1000 Words/Shutterstock)
So far, Nielsen Innovate has funded 12 startups, with a focus on supporting young companies that bring new ideas on data and market research to the table. These investments are a critical part of the company's future as it moves to carve out the same dominating niche it's enjoyed in traditional media. The current challenge? Implementing a system to deliver ratings on content from online streaming networks.
That may not seem like such a big deal, but online networks like Netflix and Amazon largely keep their viewership numbers to themselves. This leaves content owners such as ABC, NBC or other major traditional networks that license shows to these services largely in the dark on how well they're performing. By investing in innovative technologies to solve this issue, Nielsen can pull back the curtain and once again level the playing field for its clients. Its incubator in Israel is a big part of solving that puzzle.
"Nielsen Innovate has several investments that address both cross-platform viewing as well as subscription digital video consumption that we believe will continue our move toward measuring media regardless of platform," the company shared.
In a business where the next big technology is just over the horizon, Nielsen's efforts to once again change with the times bodes well for its future in entertainment. We're already looking forward to its ratings for future holodeck simulations.
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