Nielsen on Thursday introduced a new metric for measuring how many people watch streaming video and for how long.
Why it matters: Streaming is exploding, but the industry has long lacked a uniform way to measure consumption, and that has held it back from being able to integrate advertising.
Details: Nielsen says moving forward, it will use a new metric called “The Gauge,” which measures streaming in thousands of homes using hardware that tracks streaming via internet routers.
- ”The Gauge”will not just measure how streaming companies stack up against each other, but also how streaming usage stacks up to traditional broadcast and cable television.
By the numbers: In the debut report, Nielsen found that streaming takes up more than a quarter (26%) of all TV consumption, officially surpassing broadcast at 25%.
- Roughly 39% of TV consumption for people ages 2+ in the U.S. is spent on cable.
Yes, but: Because the streaming landscape is so divided, no one service owns a significant amount of viewers’ time.
- In total, Netflix owns just 6% of streaming time in the U.S. YouTube also owns 6%. Hulu takes 3%, Amazon Prime Video takes 2% and Disney+ takes 1%.
Be smart: Nielsen has long been considered the de-facto measurement vendor for traditional television. It’s been measuring streaming since 2017, but it’s taken some time for the actual streamers to get on board.
- Netflix famously said at the time that Nielsen’s streaming ratings were “not accurate.”
- In the years since, it’s become more receptive.
- On Thursday, Netflix CEO Reed Hastings told The New York Times, “They’re in a good place to referee or score-keep how streaming is changing the U.S. television landscape.”
The bottom line: The streaming industry has long struggled to agree on an authoritative measurement vendor. Now, Nielsen looks poised to win the industry’s approval.