With just hours to go before the CBS television network televises what is sure to be a heavily watched debate between two candidates for the vice presidency of the United States, Paramount Global said late Monday evening that its audience measurement contract with Nielsen has expired – part of a broader dispute between the company and the data giant.
“Nielsen has severed our long-standing measurement partnership due to unacceptable demands, including substantial price increases that do not reflect the realities of a changing industry,” Paramount said in a statement. “We have spent the last several years preparing for a multi-currency future and creating the operational infrastructure to go beyond Nielsen. We are confident in the quality of our alternative currency offering to customers as we continue to pursue a new Nielsen agreement with reasonable economic terms.”
Nielsen could not immediately comment.
Paramount had informed advertisers and their representatives last week that the company might be without Nielsen’s services. Paramount plans to rely on VideoAmp, one of a growing number of Nielsen rivals, to help advertisers track the number of people watching programs on Paramount’s media portfolio.
At issue is a long-running complaint by TV networks that Nielsen does not measure the many different audiences on their programs as well as they should. As smartphones, mobile tablets and broadband TVs gain consumer acceptance, audiences are increasingly able to stream their TV favorites on-demand, making counting them exponentially more difficult. TV networks have long based their ad rates on Nielsen’s measure of linear TV audience, which has declined as consumers embraced Netflix, Hulu, Amazon Prime and other streaming and on-demand options.
At the same time, Paramount is under extreme pressure to cut costs. The company is about to be acquired by Skydance Media, and the current management team has already started cutting $500 million from its operating structure. Skydance Media has formulated a plan that would cut costs by an additional $1.5 billion.
Paramount executives are looking at the hundreds of millions the company spends annually on Nielsen measurements, according to one of the people familiar with the situation, and believe that paying a higher fee seems unwise and not in the best interests of the company. They believe that in some cases, Nielsen’s fees would exceed the network’s total advertising revenue — a sign of how some of the company’s cable networks have deteriorated in the streaming era.
Paramount may find it difficult to do without Nielsen for long. The company’s measurements still form the basis of the media industry’s economics. Advertisers use Nielsen counts to figure out how much to pay for ads. The company expects to continue negotiations with Nielsen and hopes to reach an agreement.
Nielsen and parts of Paramount have clashed in the past. In 2019, CBS dropped Nielsen over a similar dispute over pricing. CBS went without Nielsen measures for about eleven days.