Netflix, Inc. (NASDAQ:NFLX) the popular video streaming site, and Amazon.com, Inc.(NASDAQ:AMZN) will now be monitored by Nielsen to find out how many people watch TV through streaming, says a report from the Wall Street Journal. The study will begin next month, and is done to give the networks a sense of the level of competition that they are seeing from streaming services.
Streaming services do not share data
According to a report prepared by Nielsen for its client, Netflix and Amazon subscribers watch less TV on a regular basis. This report concludes, “After people sign up for streaming video services, they watch less TV than they used to, Nielsen found: 20% less, in the 18-34 demographic, and 19% less in 25-54.”
There has been a strong belief for many years that licensing of TV shows to video streaming services leads to reduced TV watching by subscribers. To confirm this belief, Nielsen has come up with new measurements.
Netflix and other service providers have reached 40% of American homes, but they “have largely remained black boxes,” notes the WSJ report. The video streaming service providers keep the audience metrics to themselves, and do not disclose the data to the content owners making it difficult for them to charge fair prices for their shows.
The only large streaming service that happily shares its numbers with the content owners is Hulu, and its ownership is mostly the TV networks. However, the new Nielsen study will help the concerned parties get an idea of how much streaming services are watched.
Study could raise cost for Netflix
The results disclosed by Nielsen could lead to higher prices being charged by TV show owners, who license their shows to the video-streaming service providers, which could be a negative for Netflix and Amazon. Therefore, we can assume that the participation of Netflix and Amazon will be minimal as the study by Nielsen is not to their benefit.
It is still unclear how the Nielsen measurements are going to impact TV viewers at home, but the new service seems likely to help content owners get more favorable licensing deals.