By Shalini Ramachandran and Suzanne Vranica
Comcast Corp. is sitting on a potential treasure trove of data
on how Americans watch TV. Now, the cable giant is working to
unlock that information in ways that it hopes could save the $70
billion U.S. television advertising market.
Comcast is seeking to harness viewing data from the set-top
boxes and streaming apps used by its millions of cable-TV
subscribers to create products it can license to other companies,
according to people familiar with its plans. That will require
organizing a vast pool of details into "dashboards" that TV
networks and marketers can use to tap specific slices of data.
Comcast is in talks with audience-measurement firms and
television networks, including Walt Disney Co.'s ESPN, Time Warner
Inc.'s Turner Broadcasting and Discovery Communications Inc., about
licensing its data to them. It already has a deal with its own
NBCUniversal unit and at least one other media company, said people
familiar with the deals.
In recent months, Comcast rebuffed an offer from TV-ratings
specialist Nielsen, which was willing to pay roughly $100 million
for an exclusive license to the data, these people said, though the
two companies are deep in talks about other potential
partnerships.
Comcast, the largest seller of TV advertising in the U.S., says
it believes licensing its data could help the industry bolster the
TV-ad market, which has been soft amid a prolonged ratings slide.
TV networks say viewing data from the nation's largest cable
operator could plug a gap in traditional TV ratings, which don't
reflect the growing number of viewers who might be watching shows
on mobile devices or on-demand several days after the show
aired.
Comcast is betting the industry, armed with the company's data,
could better compete with Web-based rivals, such as Google parent
Alphabet Inc. and Facebook Inc., whose ad-targeting capabilities
are a big draw for marketers.
A TV network could use Comcast's viewing data, in conjunction
with third-party data on buying behavior, to answer such questions
as which shows have the highest proportion of viewers who are
shopping for a car. Such a service could command a premium ad rate,
the thinking goes. Some TV networks have already started targeting
specific audiences using data from companies like FourthWall Media
and Cablevision Systems Corp., but executives say the scale and
detail of Comcast's data would fill a major blind spot.
TV networks also are interested in using data to evaluate their
programming--to assess, for instance, whether a show with a small
audience is worth keeping on the air because it has an avid group
of return viewers.
"We do believe it's an unprecedented set of information," said
Sam Schwartz, Comcast's chief business development officer.
For decades, Nielsen, using data gleaned from a panel of U.S.
households, has been the dominant source of TV ratings. ComScore
Inc. and Rentrak Corp., two smaller firms that recently announced
plans to merge, are emerging as a potential rival.
Comcast could bring a new dimension to the measurement wars. The
company collects viewing data from about 18 million of 22 million
subscribers, say people briefed on the matter. Roughly 12 million
to 13 million of those homes have advanced set-top boxes that
collect more-detailed information than older ones.
What makes Comcast's data potentially so powerful is that its
subscribers are spread across much of the U.S., including many
major markets. While Nielsen extrapolates TV ratings from a sample
of 25,000 households, Comcast's data reflects actual viewing, and
will include its streaming apps.
"Having more precise set-top data is what will power better
monetization of premium TV inventory," said Tracey Scheppach,
executive vice president of ad-buying firm Starcom MediaVest.
"Money has moved online because they have better analytics and
targeting. TV is way behind in both of those places."
Steve Hasker, Nielsen's global president, plays down the
competitive threat set-top box data poses to Nielsen. "We think it
has a role in stabilizing the ratings, but only...when used in
combination with panel information" like Nielsen's, which provides
key demographic insights, such as viewers' age and gender, he
said.
People close to Comcast say the company is still formulating its
data strategy, including price and technology. Some at the company
think Comcast should use its data largely to its own advantage,
while others think it needs to be licensed widely to outsiders so
it gains credence with advertisers. Comcast has made clear to
interested parties that it isn't interested in doing an exclusive
deal. It has indicated to at least one TV programmer that it wants
an eight-figure sum in exchange, one of the people said.
Comcast will license only subsets of its data to any one
company, and won't give programmers information about rivals, said
people close to Comcast. The information will be aggregated and
anonymized to protect individuals' privacy.
In the short run, Comcast executives expect the company can make
the biggest impact on the TV ad market by bolstering Nielsen's
panel with its data.
In the longer run, however, Comcast sees many options. The
company has held early talks with cable operators including
Cablevision and Time Warner Cable Inc. about pooling data to
license a bigger swath of the country to parties. People familiar
with the discussions say that could allow the companies to create
an alternative TV-measurement currency based on a vast collection
of real viewing data rather than just a panel.
Marketers "can get actual measurement," said Kristin Dolan,
chief operating officer of Cablevision, which has data-analytics
deals with ESPN and Tribune Media covering more than 7 million
set-top boxes in nearly 2.6 million homes. "We're not guessing or
modeling off a small number."
Write to Shalini Ramachandran at shalini.ramachandran@wsj.com
and Suzanne Vranica at suzanne.vranica@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
October 20, 2015 05:44 ET (09:44 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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