Ops Eye Set-Top Ratings System

Pointing out problems with Nielsen Media Research’s diary system, some major cable operator executives said they would like to use the millions of digital-cable set-top boxes that are installed in subscriber homes to help measure viewing.

Coupled with the right software, digital set-tops are capable of monitoring every click of a remote control.

The ability to collect detailed viewing habits from the set-tops could allow operators to aggregate the data for use in generating program ratings that could be used to pitch advertisers.

Time Warner Cable has experimented with collecting data on viewing habits from a panel of 1,000 homes on its system in Hawaii, but no cable operator has ever established a ratings system based on data collected from digital set-tops.

That could eventually change, according to session panelists at the Cabletelevision Advertising Bureau’s Local Sales Management conference held here last week.

“We’re compelled to use our own technology to enter that [ratings] game ourselves,” Adelphia Communications Corp. senior vice president Jack Olson told attendees.

Olson and other executives on the panel, which included Time Warner Cable president of ad sales Larry Fischer, Cox Communications Inc. vice president of ad sales Billy Farina, Comcast Spotlight president Charlie Thurston, National Cable Communications president Greg Shaefer and Bright House Networks group vice president of advertising Anne Ragsdale, said that some cable networks fail to generate any rating points through the Nielsen diary system.

Farina acknowledged that there are “legal issues and privacy issues to work out” before cable operators could use set-tops to measure viewing. He added that the industry could ask Nielsen to assist in developing a new system. “Hopefully, Nielsen will be able to help.”

All of the executives cheered the rollout of Nielsen’s local people meter system, which debuted in New York on June 3, despite protests from broadcasters such as Fox Broadcasting Co., CBS and Tribune Broadcasting.

Thurston said that during the week following the June 3 rollout of the New York’s local people meter, 61 cable networks generated at least a 0.1 rating among women 25 to 54. Moreover, 22 cable networks that generated at least a 0.1 rating with the LPM service didn’t register any ratings on the diary system, according to Thurston.

“That’s why Fox is squealing like a pig,” Thurston said.

During a discussion of ways cable can drive more ad-sales revenue, panelists argued that the definition of “primetime” should change from the current standard of 8 p.m. to 11 p.m.

NCC’s Shaefer said that young men watch TV predominantly between 10 p.m. and 1 a.m.

He suggested that the primetime daypart that attracts most advertisers should be pushed back. “At some point down the road we need to completely change the way we sell television,” he added.

Last Tuesday, Cox chief operating officer Patrick Esser opined on a wide variety of topics on a separate panel, ranging from video-on-demand advertising to cable operators generating an increasing amount of revenue from non-video sources such as high-speed data services.

Esser said Cox and other MSOs will need to roll out long-form VOD advertising products, but warned of the consequences that would result if each major operator pursues unique technology for VOD ads. “The advertising community will get very frustrated, and eventually they’ll reject us,” he said.

He also emphasized that rolling out interactive services should be a priority for cable operators, since News Corp. is expected to add new interactive TV services through DirecTV Inc., which will rely on telephone lines for a return path.

“If you don’t think DirecTV will have an interactive product out in 2005, you’re crazy,” Esser said.

When asked about how MSOs could best use their local advertising inventories to market new products, Esser stressed that it’s necessary that operators use other media outlets. “We have become so dependent on our own video advertising that we’ve taken our eye off the non-video household.”

Cox is also relying more on new products such as telephone service and high-speed data to drive its earnings, Esser said.

Seven years ago, 90% of Cox’s revenue was generated from its analog video product. In 2004, less than 54% of Cox’s revenue will come from analog video, Esser added.

About 1,200 executives attended the Cable Sales Management conference, on par with last year’s confab, CAB spokesman Steve Raddock said.