Several Hundred Companies Subscribe To The Nielsen Ratings

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A national rating represents the percentage of sample homes tuned in to the same show. For instance, if a program scores a rating of 20 for the week, that means that 20 percent of the sample homes had that show tuned in for at least six minutes (about 199 sets out of the average 993 reporting). A rating is the estimated percentage of television homes (households with television sets) that Merrell Shoes On Sale watched a program, projected from the sample data. In 1999, one rating point represented 994,000 U.S. homes.

Nielsen also reports what percentage of households actually watching television is tuned in to a particular program. This number is called "share of audience."27 In Au-gust 1990, HBO's presentation of the Madonna concert "Madonna—Live! Blonde Ambition World Tour 90" became the highest-rated program, excluding sports, in the history of cable. The show drew a 21.5 Nielsen Media Research rating, and a 31 share—numbers that translated into an audience of 4.3 million households.28 In spring 1995, CNN's coverage of the Oklahoma City bombing raised its ratings ...
... to their highest level since the Persian Gulf War in 1991, eclipsing the record previously set by CNN viewership of the O. J. Simpson trial.29 In August 1998, CNN's coverage of Clinton's admission of a relationship with Monica Lewinsky drew that outlet's largest audience of the year, 5.4 million households.

Ratings provide an indication of the sorts of activities still capable of assembling a mass audience. The first night of the Gulf War attracted an audience of 133 million; 95 million viewed OJ. Simpson's chase in the white Bronco; Clinton's admission that he had had a relationship with Monica Lewinsky drew 67.6 million viewers; and about 33 million viewers watched Princess Dianas funeral, which began airing at 6:00 A.M., eastern time.

Several hundred companies (advertising agencies, advertisers, program suppliers, and the networks) subscribe to the Nielsen ratings, but the networks are the largest customers, as judged by the prices they pay for the service. Networks rely on Nielsen for about 90 percent of their information, and each pays Nielsen roughly $ 10 million a year for its services.

One weakness in the ratings is that they measure viewing demographically—by age, income, education, and family size—and demographics have little to do with interests, tastes, attitudes, or activities. The ratings are distorted to an extent because they do not reflect viewing in hotels, hospitals, bars, prisons, clubs, summer camps, military bases, college dormitories, or homes for the elderly.

Audience measurement changed dramatically with the introduction of a device known as the "people meter." Originally marketed in Europe by the London-based company AGB Research, this device instantly analyzes the age, sex, and income of viewers. These are the demographics of greatest interest to advertisers. The people meter resembles the handheld remote control devices that many people now own. The meter has buttons assigned to individual members of a family. A watcher punches in when starting to view a program and punches out when leaving. A central computer monitors who is watching what and when. The people meter not only indicates more accurately who is watching but also provides better data than diaries on what is being watched. With the proliferation of cable channels and other independent stations, diary Merrell keepers found it increasingly difficult to record their own viewing. The meter eliminates that problem. Moreover, because it gives a minute-by-minute account of viewing, rather than the fifteen-minute report from the diary, the people meter is better able to tell a specific advertiser who is watching their ads. Nielsen began using such meters in thefallofl987.