Apparently, we can’t seem to go very long without some other negotiation between media companies being played out in the press. Last month, it was DirecTV and Disney, echoing the existential battle that Disney waged with Charter a year earlier. Yesterday, it was Paramount’s turn to revive its long-simmering feud with Nielsen, as VARIETY’s Brian Steinberg “exclusively” (for a few hours, at least) reported:
Paramount Global is getting ready to smack Nielsen with a ruler.
Paramount Global has told both its ad-sales staff as well as executives at prominent media-buying agencies that it is very close to ending its reliance on Nielsen ratings data, according to two people familiar with the matter, part of a move to embrace other forms of audience measurement at a time when traditional media companies are scrambling to count viewers who use digital and social media to watch their favorite programming.
“Disengaging from Nielsen is not our first choice, and we remain hopeful for a resolution,” said John Halley, president of Paramount ad sales, in a recent letter to media agencies. “We are asking for your partnership as we navigate this situation.”
And as THE DESK’s Matthew Keys added in his writeup, there’s indeed a timing to this latest round of saberrattling:
Executives at Paramount Global have warned employees and some media agencies that the entertainment company might drop its reliance on Nielsen data on October 1.
The date coincides with the expiration of a contract between Paramount and Nielsen that involves the latter providing measurement data used by employees of Paramount’s advertising business to set prices for ad inventory on its CBS broadcast network, co-owned cable channels and streaming platforms Paramount Plus and Pluto TV.
These companies have been at loggerheads before, as Steinberg noted. In late 2018, CBS dropped Nielsen over a similar dispute tied to pricing. CBS was without Nielsen measures for about 20 days. That dispute was exclusive to the broadcast entity and was being spearheaded by a newly installed, highly aggressive and publicity-hungry head of research seeking to make a statement. The business operations of then-Viacom were more siloed at the time, and CBS sales management was headed by a veteran with long ties to a brioadcast-centric advertising community that was reluctant to embrace anything without the name Nielsen on it. But since then the company has aligned all of its linear and digital selling propositions under a unified source headed by Halley, a veteran of digital sales. And as even we have previously written, he’s no fan of Nielsen. Just about a year ago, we mused about this headline-seeking act which Halley chose to unveil at a crucial industry conference:
(I)t was during…last week’s CIMM Conference at the ARF, aka the Coalition for Innovative Media Measurement at the Advertising Research Foundation… when Advertising Age’s Jack Neff reported that yet another major client has chosen to invest in something other than Nielsen to be their arbiter:
Paramount Global chose iSpot.tv as a currency option for linear and streaming TV in the U.S., with measurement and trading on the measurement company’s data expected to begin in the first quarter, the companies announced today. The two companies currently are completing technology integrations to “enable fast, seamless advertising transactions inside of Paramount’s proprietary and licensed systems,” according to a Paramount statement.
“We are committed to supporting all new currency providers certified by the U.S. Joint Industry Committee [JIC],” said John Halley, president of Paramount Advertising, in the statement, “and we look forward to bringing greater transparency and flexibility to the way TV is transacted and measured. Our partnership with iSpot helps facilitate that goal.” The JIC was formed earlier this year to create standards for alternative currencies.
This time around, Halley’s taking his case in a more urgent manner to his current and aspirational clients, as the reported context of the letter he authored that accompanied yesterday’s news detailed:
“Nielsen is insisting on substantial price increases across all their products, including linear measurement, despite the changing economic landscape of our industry. Nielsen’s costs as a percentage of Paramount ad revenue have quintupled over significant parts of our business over the last years; in certain instances, Nielsen’s fees already exceed the total advertising revenue of the network being measured,” Halley said in the letter. “This has led us to conclude that the model, as proposed, is not workable, and that the cost structure requires re-engineering.”
What Halley addressed is a fundamental way of how Nielsen determines pricing for its clients; essentially, they rely upon ad sales revenue information required to be made public by media companies as a baseline to determine how many pounds of flesh they can demand. Their theory: the more you make, the more you need us, and you should be willing to share your wealth. The problem with that, of course, is that between the myriad and overlapping evolutions of cord-cutting, audience fractionalization and Nielsen’s struggles with being able to fully measure and report on all of this change in a timely manner, Paramount’s revenue has declined at an especially accelerated rate.
Now throw in the fact that Paramount is in the midst of a sale that this past week alone saw hundreds more jobs cut across the company, including some high-profile news anchors and IBEW workers in three locations that resulted in DEADLINE’s Dade Hayes reporting that the union vowed to closely monitor the review of Paramount’s pending merger with Skydance Media by the FCC and other regulatory agencies.
Yes, I would imagine a not-underpaid senior executive like Halley might be feeling more than a little pressure to do his part to rein in costs.
And this time around, there’s another emerging competitor whose name is being thrown around as the potential currency of record should this divorce go forward. As Steinberg parenthetically added, Paramount would rely on VideoAmp, a rival provider of audience measurement services which has struck deals in recent years with several networks and buy-siders, during any period when Nielsen tabulations are not available.
Yes, the very same VideoAmp currently run by onetime FOX honcho (and, in full transparency, my old boss) Peter Ligouri, who once reported into and has had a longstanding friendship with Paramount Global’s incoming chief executive Jeff Shell.
At least Halley is savvy enough to identify some clearly favored-nations options.
Besides all of this, as TOO MUCH TV’s Rick Ellis pointed out in his newsletter dropped last night, nowadays companies under Salley’s purview apparently don’t feel a compelling need either for an accredited source or even reporting consistency to crow about relative success:
(S)treamers as well as traditional linear networks are fond of sending out press releases that tout some out-of-context viewing number which sounds impressive but doesn’t really provide a sense of whether it was in fact a big deal.
Why do they do that? Well, so they can grab some quick headlines in the trades like the one above, which is mostly a gentle rewrite of the original press release. Here is the relevant passage :
Paramount+ today announced that Tulsa King’s season two premiere was streamed by 5.4M global active sub households in its first seven days on the service.
So what is the definition of “active sub households?” <insert giant shrug> I’m assuming it refers to subscribers who are regular viewers, although we have no idea if that means “watched Paramount+ in the past week” or “watched Paramount+ twice in the last quarter.”
Even more confusing, the last Paramount+ viewing press release I could find was for the theatrical release Knuckles, which used the metric “hours watched.”
Yeah, who needs a standardized third party service that can stand up to scrutiny when you can find a whole slew of less competent and experienced media observers than Ellis to make it appear to your bosses and your clients that your shows are doing better than the rare critical observer might otherwise uncover? Especially in a week when the entire department that oversaw Paramount+’s press releases was among those aforementioned layoffs.
If there is any solace to be taken from both the CBS negotiations of 2018 and the Disney negotiations with MVPDs more recently, cooler heads and compromise eventually do prevail. Nielsen’s price demands stem from an overly stretched management team made up of investors seeking their own best case scenario. At a certain point, having a percentage of your ask versus nothing usually seems like a wise path to pursue. And if history teaches us anything else, once a company sees something positive that they think they can crow about, they tend to look more favorably upon pursuing a deal. CBS has some strong football games and a premiere week upcoming, and THE DAILY SHOW is building to a crescendo as the election approaches. It’s not like they won’t have someone somewhere showing them numbers, even if it’s on a competitor’s device over a business lunch.
I’m sure at some level John Halley knows all of this. He’s been through more than a few rodeos and way more negotiations than moi. But I sure hope his efforts can save a few jobs besides his, and I also hope he might be open to hiring some of those who may be the collateral damage if Nielsen’s compromise position doesn’t sit well with its brass.
Eye, there’s the rub.
Until next time…