The battle between Paramount Global and measurement giant Nielsen is fast becoming a war of words.
In a dispatch sent to clients earlier this week, Nielsen CEO Karthik Rao said that Paramount has been pushing for “a nearly 50% reduction in the price of our service” in as-yet-unfruitful negotiations between the two sides that has resulted in a weeks-long blackout of use of Nielsen ratings for Paramount properties such as CBS, Comedy Central and Paramount Network.
Paramount, which is in the midst of cutting $500 million from its operations, has suggested it should not be paying Nielsen higher prices when the fees come to more than the advertising revenue that TV ratings generate. Paramount, like many of its rivals, spends hundreds of millions on Nielsen measurement each year.
“This really is not about affordability. It’s about getting the value we need for what we pay,” said George Cheeks, co-CEO of Paramount, during a call last week with investors. “And I think it’s important to consider all of this in the context of the media industry. I mean, as we all know, linear audiences, especially basic cable linear, are declining and shifting to streaming. This, of course, is going to affect how we look at the appropriate spend here. I mean, for example, we wouldn’t want the Nielsen fee for certain networks to be greater than the ad revenue those networks actually generate.”
Indeed, Paramount executives believe Nielsen’s current proposals come with what are seen as significant price escalators over the longer term of any deal framework, according to a person familiar with the matter. Given the size of the payments Paramount makes, this person added, any increases would likely be material.
Nielsen’s CEO feels that Paramount is asking for treatment that would favor one client over another. “We can not reset the value of our services to a fraction of their worth due to the circumstances and demands of one client,” Rao said in the letter, which was sent Monday and has been reviewed by Variety. “We are an industry solution and price integrity matters for the role we play in the industry.”
Both Paramount and Nielsen declined to make executives available for comment
Paramount has been without the ability to use Nielsen measures since September 30. In the interim, Paramount has relied on VideoAmp, a rival provider of audience-measurement services that has struck deals in recent years with several networks and buy-siders, and is seen by several large buying agencies as a potentially viable alternative to Nielsen tabulations.
And yet, the dispute has left Paramount unable to offer the same audience measures as its competitors. During this period, Paramount has issued no release about Nielsen ratings tied to any of its most-watched programming, including the NFL games it shows on CBS each Sunday; the performance of CBS News’ “60 Minutes”; or the CBS News-hosted debate in October between then-candidates J.D. Vance and Tim Walz.
Earlier this week, Paramount released figures from VideoAmp about the size of the audience for a new season debut for its hit series “Yellowstone.” According to those measures, the new episode drew an average of 16.4 million viewers across all Paramount networks that simulcasted the premiere, as well as encore airings Sunday night. But Nielsen’s tabulation showed approximately 13.62 million viewers watched the show on Paramount Network, CBS and a handful of other Paramount-owned cable networks. Advertisers and media buyers that have their own deals with Nielsen still have access to ratings for Paramount programs and might examine the disparities in the two measurement companies’ results.
Paramount has confidence in VideoAmp’s technology, according to the person familiar with the matter. The company has deals in place with several other networks and buying agencies, and is working with the Media Rating Council, an industry organization that governs use of various measurement methodologies, to gain industry backing. This person noted that Nielsen also has several measurement services in use that also have yet to win MRC sign-off.
At issue is a long-running complaint from TV networks that Nielsen isn’t measuring the many different audiences for their programming as well as it should. As smartphones, mobile tablets and broadband-connected TV’s gain more consumer acceptance, audiences are increasingly able to stream their TV favorites in on-demand fashion, making the task of counting them exponentially more difficult. TV networks have long based their advertising rates on Nielsen’s measure of linear TV audiences, which have slipped as consumers embraced Netflix, Hulu, Amazon Prime and other streaming and on-demand options.
In recent months, however, Nielsen has made some marketplace gains. It recently won accreditation of its ability to use media companies’ own first-party data in its audience tabulations. Already, Amazon Prime Video has been working to add that to ratings for its streams of the NFL’s “Thursday Night Football.”
Nielsen’s CEO said the company is not trying to force mammoth prices increases on to a client, but is rather “aiming to maintain fair value for the quality of our services — services that are empirically better than at any point in our history. Our proposal to Paramount is eminently reasonable and commensurate with the value our services deliver.”
The executive said he remains “hopeful that we will reach a deal with Paramount Global.” But the longer the companies are deadlocked, the more difficult it may be to come to terms.
