Under the banner
of Nielsen Media Research the A. C. Nielsen Company measures and
compiles statistics on television audiences. It sells this data
in various formats to advertisers, advertising agencies, program
syndicators, television networks, local stations, and cable program
and system operators. Nielsen Marketing Research is the larger part
of the company, providing a variety of standard market analysis
reports and engaging in other market research. By some reports only
10% of Nielsen's total business relates to the television audience,
though they are very well known to the general public for that work.
This is due, of course, to the ubiquitous reporting and discussion
of program and network ratings produced by Nielsen.
was started in 1923 by A. C. Nielsen, an engineer, and bought by
Dun & Bradstreet in 1984 for $1.3 billion. They first became involved
in audience studies in the 1930s as an extension of Nielsen's studies
tracking retail food and drug purchase. In 1936 Nielsen bought the
Audimeter from its designers, Robert Elder and Louis F. Woodruff,
two Massachusetts Institute of Technology professors. The Audimeter
(and a previous design for a similar device patented in 1929 by
Claude E. Robinson then sold to RCA who never developed it), was
intended to automatically record two aspects of radio listening
which would be of interest to programmers and advertisers. The device
recorded which frequencies a radio set was tuned to when it was
on and the length of time the set was on. This technique had an
obvious problem--it could not assure who, if anyone, was listening
to the radio. But compared to the use of telephone surveys and diaries
used by competing ratings companies it had important advantages
as well. The other ratings methods depended to a much greater degree
on audience members' active cooperation, memories, honesty, and
After a period
of redesign and a four year pilot study, the Nielsen Audimeter was
introduced commercially in 1942 with an 800-home sample in the Eastern
United States. The number of Audimeters and the sample size and
coverage were expanded after World War II, eventually, by 1949,
to represent 97% of U.S. radio homes. The Cooperative Analysis of
Broadcasting had ceased providing ratings in 1946; in 1950 the A.
C. Nielsen Company bought Hooper's national radio and television
ratings services and thus became the single national radio rating
service. This allowed the company to increase rates and the new
capital was used to increase sample size. As the television industry
grew, Nielsen's attention to television grew with it; they left
the radio field in 1964.
In 1973 Nielsen
began using the Storage Instantaneous Audimeter, a new and more
sophisticated design for the same purposes as the original (surely
not the only modification over the years, this one was much publicized).
Set in a closet, designed with battery backup for power outages,
and hooked to a dedicated telephone line for daily data reports
to a central office, the device kept track of turn-on, turn-off,
and channel-setting for every television in a household, including
battery operated and portable units (through radio transmitter).
While the Audimeter,
widely known as the Nielsen black box, was their most famous device,
it was used only for household television ratings. For ratings by
people and demographic descriptions of the audience Nielsen required
supplementary studies of audience composition based on a separate
sample using the diary technique. This separate sample was smaller
and there was concern in the industry that the people who cooperated
with the diaries were not representative of people in general.
A Nielsen viewing
Photos courtesy of A.C. Nielsen Company
A Nielsen "Peoplemeter"
Photo courtesy of A.C. Nielsen Company
the Peoplemeters produced different numbers than diaries, they generated
controversy in the industry. Ratings points are the reference for
negotiations in the purchase of advertising time, in deciding which
programs are syndicated, and other issues vital to the television
industry. Thus when different measurement techniques produce different
ratings, normal business negotiations become complicated and less
predictable. For this reason many participants in the television
business actually prefer one company to have a monopoly on the ratings
business, even it if does allow them to charge higher rates for
their services. Even if this service provides inaccurate numbers,
those numbers become agreed upon currency for purposes of negotiation.
Eventually the most recent controversies were settled and Nielsen's
Peoplemeter system now dominates the production of national television
Audimeter was originally conceived as a means to the testing of
advertising effectiveness. To at least some extent Nielsen's own
interest in broadcast audiences was originally motivated by his
marketing and advertising clients. But the ratings have grown to
be an end in themselves, a product sold to parties interested in
the composition of audiences for broadcasting.
the ratings reports provided by Nielsen were, until 1964, the Nielsen
Radio Index (NRI) for network radio audiences. Currently the company
provides the Nielsen Television Index (NTI) for network television
audiences, the Station Index (NSI) for local stations and Designated
Market Areas (DMA's), the Syndication Service (NSS) for the audiences
of syndicated television shows, and the Homevideo Index (NHI) for
the audiences of cable networks, superstations, and homevideo. They
periodically produce reports on special topics as well, such as
video-cassette recorder useage, viewership of sports programming,
or television viewing in Presidential election years.
Hugh Malcolm. Audience Ratings: Radio, Television, and Cable.
Hillsdale, New Jersey: Erlbaum, 1985; revised edition, 1988.
Karen. Electronic Media Ratings. Boston, Massachusetts: Focal,
Joseph R., and James E. Fletcher. Broadcasting Research Methods.
Boston, Massachusetts: Allyn and Bacon, 1985.
Charles III, and Archie Greer, editors. Broadcast Programming:
The Current Perspective. Washington, D.C.: University Press
of America, 1981.
James G., and Lawrence W. Lichty. Ratings Analysis: Theory and
Practice. Hillsdale, New Jersey: Erlbaum, 1991.
TV Ratings Really Mean, How They are Obtained, Why They are Needed."
New York: Nielsen Media Research, 1993.
See also A.C. Nielsen; Market; Ratings; Share