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Measuring Media Consumption: Multiple Business Models for Streaming Video

9/09/2013 8:24 AM Eastern

As more consumers watch their favorite shows on devices other than televisions, advertisers face a challenge: how can they accurately measure viewership for programs delivered to second screens? That is, how do advertisers know how many people have watched a given advertisement on devices other than TVs? Technology may be the answer, but there is still some heavy lifting left to do.

Any programmer that offers ad-supported programming is critically dependent on ratings as currency.

Dale Rochon, founder of the Advanced Advertising Forum, says, “A key issue for companies who want to advertise on second screens is the lack of a widely accepted ‘currency’ like the ratings for video content that are validated by a governing body such as the Media Ratings Council. It is important to broadcasters, programmers and advertisers to accept this ratings currency as a trusted and verified common medium of measurement.”

Consumers have essentially two choices for legally watching high-quality video content: free programming that is supported by advertisers and subscription-based programming that is supported by fee-paying consumers.

Pay channel operators such as HBO and Showtime measure mobile and second-screen viewership relatively easily. Viewers need to subscribe to the pay service by way of one of the multichannel content distributors (local CATV or IPTV provider, or direct-satellite broadcaster). These subscribers, and only these subscribers, can then use a (sometimes onerous) authentication procedure to enable viewing on mobile devices.

Many channels, such as cable behemoths ESPN and CNN, employ a blend of pay and subscription strategies by charging fees to programmers while also running ads during broadcasts. Any programmer that offers ad-supported programming is critically dependent on ratings as currency. Without these ratings, advertisers cannot use their traditional CPM (cost per thousand) viewing statistics to calculate their costs of advertising. Companies such as Nielsen use both automated and manual techniques to monitor consumer viewing habits.

Automatic Ratings Systems

HBO subscribers use an authentication procedure to enable viewing on mobile devices.

For automated ratings, the Nielson company uses an audio watermarking process. The term “watermarking” comes from the printing industry, where subtle marks may be added to stationary, money and other paper goods during manufacturing. The marks are often not easy to see unless you’re specifically looking for them. As it applies to video content, watermarks are low-volume signals that are embedded in the audio track of a broadcast. (Viewers are not able to hear the audio watermark.)

The Nielsen technique employs an encoder located in the broadcast facility originating the programming; in many cases this is a local affiliate of a broadcast television network. The encoder processes the audio portion of the broadcast channel to insert a series of low-volume audio watermarks into the outgoing signal. Insertion points are carefully chosen within the audio by the encoder to ensure that the watermarks are not inserted during quiet passages in the audio, and that the program audio is loud enough to mask the inserted signals. The resulting watermarked signal can then be delivered through various mechanisms to reach the viewer, including over-the-air broadcast, local cable TV network, and direct-to-home satellite feed.

The watermark is designed to be robust enough to survive any distortions that are encountered on the way to the viewer, such as noise, nonlinear gain, decoding and re-encoding to change compression systems or signal bit rates, and other impairments. Audio watermarking also works for programs that consumers have recorded onto DVRs (digital video recorders) to view later, which permits Nielsen to report on the number of viewers who watch a program within 72 hours of its original broadcast in addition to the program’s “first run.” (This statistic is called the C3 rating, or “commercial ratings +3.”)

2013 IDG Global Solutions (IGS) research based on 25,601 worldwide technology professionals and consumers shows that across every corner of the globe the volume of people interacting with mobile is escalating. Whether on tablets or smartphones, at work or outside of it, survey participants consume all forms of content from entertainment videos, to product research, to full commercial engagement with advertising.

In selected consumer homes, a Nielsen-supplied device is installed and set up to monitor the audio output from each television in the viewer’s home. After a channel change, the monitoring device is able to detect the watermark from the new program and continue to capture viewership data. This system also allows Nielsen to determine if the viewer has muted the audio during advertisements.

Now consider a situation in which a viewer in a Nielsen household decides to watch a video program using a laptop or desktop computer. In this case, the audio monitoring function is not very useful, particularly if the viewer is using headphones. To fill this gap, Nielsen will install a device that monitors the viewer’s Internet connection. (The device is deployed in about half of the Nielsen households.) This unit is able to monitor back-and-forth data traffic and capture viewing data for video signals being sent through the home’s local network.

Unfortunately, the above schemes have left uncovered a potentially significant mechanism for viewing content: devices that connected to the mobile telephone network, including smartphones and tablets. These devices get their data directly from a 3G or 4G LTE network, and there is no convenient place to put a measurement box to monitor the programming being played on these devices. It is hard to imagine viewers willingly carrying some sort of dongle around with them that will monitor their viewing habits. Another approach would be to use some type of software monitoring system, either at the source of the video or in the form of an app installed on the user’s device, but these might be hard to implement across multiple delivery systems and different brands of user devices with varying methods of DRM or encryption.

Practicalities

For today, the best solution for advertisers may be to rely on reports from the content originators. Since video signals must be unicast over the Internet from a server to each individual viewer, the providers of this programming have the technical ability to record the IP address of everyone who watches all or part of a video program, including any inserted commercials. While this may be a case of allowing the fox to watch the chicken coop, this method is relatively straightforward to implement and can cover all viewers, not just a sample.

Efforts are underway at organizations such as the Interactive Advertising Bureau and companies like ComScore to develop a ratings currency for second-screen video that will be acceptable to programmers, broadcasters and advertisers alike. Once this happens, advertising-supported second-screen viewing of first-run content will have a much better chance of reaching its full potential.

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