The adoption in 2007 of the C3 commercial rating as the standard currency in the purchasing of national television audiences is perhaps one of the most profound changes to affect the economics of television in the past 20-30 years. However, as recent developments indicate, this change is not yet complete.
A couple of recent developments highlight the gradual, evolutionary process that characterizes even a change that seems as sudden and dramatic as the adoption of the C3 currency in 2007.
First, it is important to emphasize that the C3 rating has applied, up to this point, only to the purchasing of national television audiences. As I’ve discussed previously, the C3 has not yet trickled down, so to speak, to local television markets; and it is only beginning to tentatively appear in the measurement of online audiences. Nor has it yet been applied to other viewing platforms such as on-demand.
The C3’s reach may soon be expanding, however, with the recent announcement by Nielsen that it is developing an “On Demand C3.” The ODC3 system will produce a single rating that includes a show’s live telecast, along with time-shifted DVR viewing (the components of the traditional C3), and a combined C3 for all of the older episodes available on demand. Of course, as is the case with the TV/online combined C3 metric I discussed not too long ago, it is required that each program stream contain exactly the same commercial load.
In other C3 news, the very nature of the C3 may be continuing to evolve. The current C3 rating is calculated by computing the average rating of all of the commercials contained within a particular program. Some stakeholders have criticized Nielsen for this lack of granularity in the C3 (why, they argue, shouldn’t they be able to find out the audience size of an individual commercial, or at least an individual commercial pod?).
This may be changing with the recent announcement by emerging Nielsen competitor Rentrak that the company will be offering “Exact Commercial Ratings.” These ratings, which will be derived from Rentrak’s digital set-top box measurement system, will allow subscribers to assess the ratings performance of individual commercials. However, in keeping with the persistent pattern we see in audience measurement, this more granular approach to understanding television audiences will only be available at the national level and not at the local level.
One could argue that these efforts by a relatively small competitor to Nielsen hardly herald a change in the nature of the dominant currency in the television industry. However, history tells us that, while Nielsen might not always take the lead in innovation in audience measurement, they do tend to respond to (and absorb) the innovations produced by others (for example, Nielsen didn’t introduce the People Meter in the U.S. until Audits of Great Britain brought it over from the U.K. in an effort to crack the U.S. market). Thus, it stands to reason that Nielsen will soon respond to this development by Rentrak with its own form of exact commercial ratings.