Last week’s column reviewed the new competition in the TV measurement space and the potential downstream impact on Nielsen’s audio measurement. I’m going to stick with video this week because announcements from Netflix and Amazon Prime Video have caused a stir.
First, Netflix tried to put a number against its ad-supported service by creating a new metric called “Monthly Active Viewers” (MAV). Across 12 countries, Netflix claims to have 190 million MAVs, per Amy Reinhard, the company’s president of advertising.
How did Netflix arrive at this number? It’s simple. If you watched one minute of advertising on Netflix in a month, you’re a Monthly Active Viewer. Then, the company multiplied that number by a proprietary average number of people in a household. Ms. Reinhard said this would provide a “clear and understandable” benchmark for how many people see commercials on Netflix.
I agree that the MAV metric is clear and understandable. It’s also a load of cow dung (the original word used might not get through your corporate filter, but you get the idea) because we all gather around the Philco every night to watch Netflix as a family unit, right?
While I don’t look at LinkedIn very often, I happened to see a comment about Netflix’s assertion from Kym Frank at Fox, who’s been around the video research business for a while. She wrote, “If we used this trick to calculate the World Series, for example, it would inflate reach by 70%.”
Not to be outdone, Amazon said that Prime Video now reaches 315 million people. Take that, Netflix! In this case, rather than have their method ridiculed, they simply gave the number (it includes 16 countries). Amazon’s VP of Prime Video Advertising called the estimate “a transformative milestone.” That’s a reasonable statement if you are running up your own estimates!
Let’s compare this to radio measurement. Nielsen changed the traditional “five-minute” rule to three minutes for PPM at the start of the year. In radio, three minutes of listening gets you 15 minutes for one person. With Netflix, one minute gets you a month. Everyone else in the home is included as well.
Why do I have this image of Oprah in my head? “You get a month, and you get a month, everyone gets a month!” Here’s the link if you need a refresher from 2004. I wonder how many of those Pontiac G6s are still on the road.
My guess is that the calculation of Amazon’s metric isn’t far off from the Netflix version. Netflix might argue that the minute involves seeing an ad. With the spot load on many U.S. radio stations, I’ll bet we don’t need to worry about what would be a radio “ad cume.”
Another aspect of the Netflix and Amazon numbers is that they come from the companies themselves, not an independent third party, for example, Nielsen. If the RAB or Pierre Bouvard’s operation wanted some big numbers for radio, it wouldn’t be hard to do. An online survey of radio users? Guess what? Everyone listens to radio for at least a minute over the course of a month. You may not even own a radio, but you were in a store that had a radio on or perhaps an Uber or Lyft where the driver had his or her radio playing while you checked your phone.
Could Nielsen put together an equivalent number for radio? Of course. It’s called the National Regional Database, or NRD, which is a semiannual rollup of all listening across the country and runs on Tapscan (you must subscribe to it separately). Just ask for a quarter and select every station in the U.S. You’ll get a mighty big weekly cume number.
I’ll bet radio can beat Netflix’s 12-country number in the U.S. alone using just one week! And that would be a 12+ number while Netflix is stretching its estimate to everyone in the household, meaning 0+. We can fix that, too. Just add the percentage of the U.S. population that’s 0–11, apply the percentage from the Nielsen run (cume rating), and add it in. Radio might even match Amazon with 15 fewer countries and a lot fewer days.
In September, I wrote a few columns sketching out a measurement system for the future. One suggestion was one minute earns the quarter hour. When I wrote it, it felt like a stretch. Now that we see what Netflix and Amazon are doing, both of which have video ad revenues in the multi-billion range, yet the companies feel compelled to get “creative” with their reach. Maybe one minute for the quarter hour isn’t so far-fetched after all.
Let’s meet again next week.
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