Why watching TV online (mostly) doesn't help ratings (for now)

tvlaptopphone.jpg

If you legally watch a TV show online, does it count toward the ratings? It's a question I get asked a lot because more people are watching shows online, and those people know ratings determine if their favorite shows get canceled or renewed.

The answer is no, yes and sort of.

The "no" answer is easy to explain. TV ratings specifically measure the audience watching shows on TV, while a different kind of ratings system (actually several kinds of systems) measures audiences who watch online. Even though they share a lot of the same content and are integrally linked, online streaming and TV are fundamentally separate businesses that are usually distributed, funded and monetized in different ways.

Although we can and sometimes do compile an aggregate number of all people who watch a show regardless of what platform it runs on, that's not an especially useful number on a day-to-day business level. For instance, if an advertiser buys an ad in the BOING SHOW on TV, they don't care how many people watched the show on iPhones because they didn't pay to have their ad run on iPhones. Sometimes advertisers will buy on air, online and mobile simultaneously, but it's not the standard (yet).

Side Note: The convergence of advertising is particularly tricky because companies all buy ads in different ways. Some like to buy TV and the Internet as a package, some buy both but they do it separately, some buy only one or the other, and many use third-party agencies to help them figure out what and how to buy. Those agencies might use different internal buyers and planners for TV than online, and so on. Even when everyone wants to buy the Internet and TV together, syncing up the different groups with their schedules, creative and budgets can be challenging.

On the other hand, YES! We do track who watches shows online, and we track the revenue that comes in from those viewers. Depending on a variety of factors, that revenue might go directly to us, directly to the show's producer, or be divvied up in any number of ways, with distributors like Hulu taking a cut too. Each deal is slightly different because no absolute standards have emerged (again, I'll add "yet" here). All of those viewers and the revenue that comes from them DO count toward the success of a show.

The most accurate answer is probably the "sort of" one. Because the streaming markets for Web and mobile are relatively new, the revenue from them is small. So while revenue from them counts, it's not an especially big number right now and we still make the overwhelming majority of money from TV viewing. We'd rather have a million TV viewers than a million streaming viewers because we make more money from the TV viewers, which means they contribute more to the health and success of a show.

Like most answers in the TV industry this one is murky, at times contradictory and will probably change tomorrow. But as things stand today it's a pretty decent overview of how your viewing habits contribute to the health of a show. TV is still by far and away king, but the landscape is evolving and that can -- and probably will -- change in the next few years.