Nielsen Delivers Incorrect Ratings As Competitor Grows

A technical error has resulted in six months of false rating for the major networks at the same time some analysts question the company's relevancy.
Posted at 7:44 PM, Oct 10, 2014

Television research firm Nielsen announced Friday that an error in its rating system led the company to release incorrect ratings for shows on four of the largest networks for the last six months.

The company released a statement explaining a technical error was responsible for the glitch and it wasn't noticeable until the fall premiere season kicked off a few weeks ago. It plans to reissue data that was affected.

The error was small. It affected a chunk of data that represents between 0.1 percent and 0.25 percent of all viewing minutes collected nationally and resulted in some shows getting credited with minutes that should have gone to other networks. 

Nielsen's ratings tell networks how many people are tuning in to their shows and at what time and are the largest factor in determining if a show will stay alive or get canceled. Even more importantly, it determines how much each show's advertising space is worth.

ABC was the network most affected by the lift in ratings with shows like "Modern Family" and "Scandal" getting a larger-than-normal boost over live and same-day viewing numbers. 

And The Wrap reports ABC execs are, big surprise, not too happy over the screw-up. An ABC statement to The Wrap reads, “Our entire industry relies upon Nielsen for accuracy and veracity, and we hope that they can quickly resolve this issue." 

This couldn't have come at a worse time for Nielsen. Lately, the company's sampling methods have been criticized.

Vox writes"Nielsen is constantly battling off arguments that it should be replaced by something that literally measures what everybody watches. ... Instead it constructs a representative statistical sample of the US population, then calculates viewership rates based on what that sample watches."

Plus, lately there has been some strong buzz about its biggest competitor, Rentrak.

It recently made a deal with global ad giant WPP that analysts say will allow it to expand its operation considerably, enabling it to challenge Nielsen's ratings dominance. 

And investors certainly seem to think so. Bloomberg reports that Rentrak's stock rose 12 percent Thursday while Nielsen's fell 4 percent. 

Nielsen's revised ratings are expected Oct. 13

This video includes images from Getty Images.