In a sign of the rise of online streaming, Nielsen ratings will now be tracked for Netflix and Amazon Prime. The service, which launches in December, will offer the first public insight into the popularity of the two video streaming services. Both Netflix and Amazon Prime track the streaming that goes on in their services, but those figures are not published for the general public. Rather, the companies use the data to determine which licenses to renew.
As pointed out by developer Ben Shaoul, there are gaping holes in the new service Nielsen is launching. The most obvious flaw is that video streaming on tablets, smartphones, and other mobile devices will not be tracked. This omits a significant amount of video streaming. The second flaw is that Nielsen has long been criticized by traditional cable and television providers for its shortcomings. Essentially the same model applied to those delivery methods will be applied to Netflix and Amazon Prime. At the same time, Nielsen is the only game in town when it comes to TV rating.
Both video streaming services are making inroads with their business models. It is proving to be lucrative for the TV networks as well. Netflix recently paid a total of $9 billion to TV networks for the licensing rights to stream content. This represents a new and profitable revenue stream for TV providers. Ultimately, this is the real ratings metric that will matter. The Nielsen rating may indicate shows A, B, and C are highly watched, but what Netflix and Amazon Prime pay to license is the truest indication of what their viewers are streaming.