What Paramount and Nielsen’s Contract Dispute Means for the Future of Alternative Media Currencies
A major battle in the media currency wars is underway between two heavyweights in the media world: Paramount and Nielsen Research. On one side we have Paramount, one of the largest media conglomerates in the world. Their portfolio includes some of the most iconic and highly-rated broadcast and cable networks including CBS, MTV, Comedy Central, BET, and Nickelodeon along with the streaming platforms Paramount+ and Pluto. On the other side is Nielsen, the default media research and currency provider for every media company and agency in the country. This fight between two legacy media companies may have lasting ramifications for the future of alternative media currencies for years to come. So, how did we get here?
As often is the case, it comes down to money. Paramount’s contract with Nielsen expired on October 1. While both parties were negotiating a renewal, Paramount’s primary concern was cost. John Halley, President of Paramount Advertising wrote in a memo to clients that “Nielsen’s cost as a percentage of Paramount ad revenue have quintupled over significant parts of our business over the last years.” Paramount claimed that the cost of Nielsen’s services for some of their networks “already exceed the total advertising revenue of the network being measured.” It doesn’t take a genius to know that isn’t a sustainable business model for Paramount.
For their part, Nielsen also sent a letter to their clients – including Rain the Growth Agency – warning that “despite our best efforts, Nielsen and Paramount have not been able to come to terms on a new agreement. Without a new deal in place…Paramount will no longer have access to Nielsen’s products and services.” At the beginning of the standoff, Nielsen expressed optimism that it would not last long and that they “…look forward to reaching a new deal with Paramount as they modernize their business.”
At first, this felt like deja vu. In 2019, both companies had a similar impasse, but a new contract was signed quickly. This time, they are into their second month with no signs of resolution. What has changed in the last five years to make that possible?
The Rise of Alternative Currencies
The biggest change is that Nielsen’s legacy status as the only game in town has been challenged by a group of competitors that are earning accreditation, certification, and acceptance from the advertising ecosystem. In 2019, Paramount turned to Comscore as their backup currency, but at the time it did not feel like a long-term solution. Now, Paramount is leaning into VideoAmp as their backup currency. VideoAmp received certification from the Joint Industry Committee earlier this year, but has not yet earned accreditation by the Media Ratings Council. They have measurement contracts with other major networks, like Warner Bros. Discovery, and agencies have expressed a greater willingness to transact on currencies other than Nielsen.
The fight escalated on November 11, as Nielsen sent another letter to its agency clients responding to Paramount’s position and their selection of VideoAmp to replace Nielsen. In the letter, Nielsen CEO Karthik Rao stated that “Paramount is demanding a nearly 50% reduction in the price of our service. This not only undervalues our substantial investments, but makes it unsustainable to provide the support and quality that all Nielsen clients rely upon.” He went on to take a shot at VideoAmp’s product, saying “this substitute provider’s data lacks the precision to deliver reliable, actionable insights, particularly for over-the-air broadcasting and live sports.” While Rao claimed that “I remain hopeful that we will reach a deal with Paramount Global…” the letter’s tone doesn’t give the sense that they are any closer to a deal.
Impact on Advertisers
What does all this mean to advertisers? First, it is important to note that while Paramount is not currently a subscriber to Nielsen, Rain the Growth Agency still is. That means we still access and track performance using Nielsen ratings for all of our clients every day. Since Paramount no longer subscribes to Nielsen, they will be relying on VideoAmp impressions for post-analysis and audience guarantees, where applicable. This puts Rain the Growth Agency in the unique position of seeing a head-to-head comparison of the two measurement services to better understand their strengths and weaknesses. For our clients who do have audience guarantees on Paramount properties, our dedicated and experienced Integrated Media Investment team is there to ensure that every client receives the full value of what they purchased while Nielsen and Paramount work through this.
For everyone else, Paramount may represent the first step towards even greater adoption of alternative currencies in the media marketplace. Ending Nielsen’s monopoly on media currency would be good for our industry – competition encourages innovation and keeps prices in check—but it is too soon to say if this is a short-term detour or a longer-term shift that will alter media measurement for good.
This article is featured in Media Impact Report No. 60. View the full report here.
