TV providers divided on set-top ratings system

Canada’s biggest television providers are divided over the future of audience measurement via the next generation of set-top boxes. As part of their submissions in the CRTC’s ongoing Let’s Talk TV consultation, BCE Inc., Rogers Communications Inc., Telus Corp., Quebecor Inc. and Shaw Communications Inc. all weighed in on the creation of a new audience measurement system based on set-top box (STB) data. Shaw and Bell, the No. 1 and 2 providers of TV service in Canada according to the most recent year-end filings, were broadly in favour of investing in audience measurement via STB, while Rogers, Quebecor and Telus said such a system would be unnecessary, costly and not address current shortcomings in monitoring Canadians’ TV habits. According to a filing from Numeris, formerly BBM Canada, the industry-created non-profit ratings group, a new body tasked with collected and distributing anonymized ratings data from set-top boxes would help “the Canadian distribution business and the Canadian content business grow stronger with extremely large samples providing confidence in programming decisions in an ever-fragmenting world." Numeris said that the vertically integrated nature of Canada’s broadcasting market, where the largest distributors are also content owners, gives companies an incentive to build a system. “We believe building a national STB audience measurement system is a logical next step,” the company said. Numeris suggested the creation of another agency that would provide the cable and satellite providers with “universal, clean” data from set-top boxes on who was watching their channels and when. Bell said in its filing that it is “ready to work” with the other broadcaster distributors to build such a system. “Bell is willing to participate in a BDU-owned consortium, using a third-party aggregator to compile the viewership data from individual BDUs, and make that high-level aggregated information available by market and by channel on agreed upon terms and conditions to programming services,” the company said in the filing. In its vision for a third-party aggregator of STB data, Bell said such an entity would provide feedback to every broadcaster and content provider. In order for the system to work, Bell said, it needs to be adopted by every participant at once. “To ensure that the STB data provided has sufficient value, Bell believes that it is incumbent on all licensed BDUs, regardless of ownership and size, to participate in a STB-based audience measurement system,” the company said. Bell also wants to bring Netflix Inc., which does not release data on its viewing numbers in Canada or the United States, and other over-the-top content providers, into the audience-measurement system. If OTT providers refuse to hand over their numbers, Bell said, then the STB ratings agency should refuse to give them data from other providers. Bell called on the CRTC to form a working group to determine the arrangements for a new STB audience measurement system and set a deadline for participation of September 2016. Shaw said an STB-based system could help the traditional broadcasting compete with OTT providers who have several advantages because of their streaming model. “One of these advantages is the streams of data they gather and use to make real-time decisions,” the company said. “In response, cable, satellite and media companies in Canada must begin to explore steps to use STB information to better serve customers, viewers and advertisers. The use of STB data has the potential to turn a competitive disadvantage into an advantage for the system.” Shaw proposed a third-party system, similar to that described by Numeris, and said it would “support and participate in” a working group on STB audience measurement, with participation from the CRTC. “As we participate in the development of an industry-wide solution, Shaw will continue to pursue its business objectives in the area of targeted and advanced advertising, to gain insights that will better serve our customers,” the company said. There are limits to the value of set-top box data, the company said, yet the companies should work together with one another and the CRTC to see how that information can be put to best use. “The ability to measure second-by-second viewing on the set-top box (e.g. live, PVR, VOD) and harness very large samples can provide better insight into niche channels and demographics,” the company said. “It can also provide valuable insight into customer preferences, product usage and viewing habits, and could help to power recommendation engines in future IP delivery models.” Quebecor, the fourth-largest TV provider in Canada, disdained the potential for set-top box data to provide anything more than the most basic information. “STB-based audience measurement systems have their limitations, since they do not provide data on the demographic breakdown of viewers, number of viewers, or viewing outside the home,” the company said. “They also make it difficult to distinguish between tuning and watching a channel when the set-top box is on but the TV set is off.” Quebecor said it was opposed to an industry-wide STB audience measurement system because of the high cost and questionable benefits. “Setting up this new system would necessitate the installation of expensive and sophisticated broadcasting systems by both broadcasters and BDUs, and introduction of the new survey methodology would require its implementation by all BDUs,” the company said in the filing. Rogers, the third-largest TV provider, said in its filing that a stand-alone STB audience measurement system would be “difficult, if not impossible” to implement and would not be any better than what exists now in helping advertisers target their ads, Rogers said. “STB data collection was principally designed to help distributors set packages and channel line-ups, not to establish a separate and unique audience measurement tool to sell commercials,” the company said. Using set-top box data in conjunction with traditional forms of audience measurement, such as diary-keeping and panel surveys, is the best way forward, Rogers said. “There is no need, however, for such an STB-supported system to be mandated by regulation,” the company said. “The Commission’s role should be limited to encouraging the broadcasting industry to work with BBM to supplement the current audience measurement system that has been used by the broadcasting industry since 1944.” Telus, which has the fastest-growing television-service in Canada after adding 137,000 subscribers in 2013, said in its filing to the CRTC that it sees “little value” to an STB ratings system in Canada, adding that it was skeptical on whether set-top boxes can provide information about who is actually watching television at any particular time. “The type of data that is currently available does not respond to the needs and demands of advertisers,” the company said. “Set‐top boxes do not provide any demographic data about the viewer, and so the value of collecting any data is minimal at best.” Telus also defended the current system, saying “the vast majority of broadcasters are already well‐served by the audience measurement system established by Numeris” and that, instead of adding set-top box data, Numeris should use representative panels to augment their ratings. “Rather than reinventing the wheel, the Commission’s and industry’s resources and efforts would be better directed to modifying Numeris’ existing system,” the company said. Telus cautioned against the CRTC taking too strong a role in instituting an STB data collection system. “Regulatory intervention, especially at the outset, would only distort the cost‐benefit analysis, and reduce any potential benefit to the system,” the company said. “TELUS firmly believes that stakeholders will establish an STB‐based audience measurement system if the benefits of such a system truly outweigh the costs.” While the distributors were divided, television producers who responded to the CRTC took a more positive approach to the idea of a new ratings system. “Access to enhanced audience measurement using set-top boxes (“STBs”) is critical to the entire industry,” Pelmorex Media Inc., owner of the Weather Network, said in its filing. “With TV measurement data from STBs, programming services will be able to make themselves more competitive when competing for advertising dollars. It will also enable all Canadian programming services to make more informed programming selections and scheduling decisions.” The Canadian Media Production Association (CMPA), a national trade association for independent film and television producers, said in its filing that the data should be available so that producers can better respond to “changes in the industry and to the needs and interests of viewers.” “Often independent producers are disadvantaged in negotiating programming deals with broadcasters (e.g. for renewals) because the broadcasters are the only party with reasonable access to data showing how well the producers’ programs have performed,” the CMPA said in the filing. “We therefore agree that access to accurate data measuring, for example, viewership levels to programs, could serve to increase revenues flowing to program creators.“ A new form of audience measurement also raises questions about privacy, which the CRTC asked of its respondents in the Let’s Talk TV consultation. The Forum for Research and Policy in Communications was leery of the regulator’s power, writing in its filing that the impact of any set-top box audience measurement system “on Canadians’ right to privacy about their cultural activities cannot be satisfied by any reporting system the CRTC devises.” Telus and Quebecor declined to comment on the privacy implications of an STB-based system, but Bell, Rogers and Shaw all provided answers to the commission on how consumers’ privacy would be dealt with under a new system. “Ideally, a BDU should only be required to provide its STB viewership data in a consolidated manner to the third-party aggregator,” Bell said. “This will ensure that individual subscriber information remains with the BDU, allowing them to retain responsibility for maintaining the privacy of subscribers.” Rogers said that, if such a system were implemented, existing privacy protections would be enough. “If the viewing data obtained from STBs is provided in aggregate to an organization like BBM, then it is unlikely that privacy protection methods would have to be established,” the company said. Shaw said Canada’s current privacy laws would be enough to protect Canadians, as any audience measurement system must comply with the applicable rules. “Privacy laws are sufficient to protect Canadians from misuse of STB data,” the company said. — With reporting by Peter Henderson at phenderson@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

TV providers divided on set-top ratings system

Broadcast | July 25, 2014

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TV providers divided on set-top ratings system

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