Wolk’s Week in Review: Measurement Wars heat up, Roku gains a beachhead in Britain

Wolk's Week In Review

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1. Measurement Wars Heat Up

Paramount announced this week that it was going to add iSpot to the list of approved vendors that can be used as currency on its deals. The company joins VideoAmp and Comscore on Paramount’s list of Nielsen alternatives.

The fact that major media companies like Paramount are now offering up alternatives to Nielsen is significant but that’s not the real story here.

The real story is found in a quote from Paramount Advertising's President, John Halley, who notes that, “We are committed to supporting all new currency providers certified by the U.S. Joint Industry Committee [JIC].” 

The JIC, whose members include major media companies, major ad agencies and major measurement companies not named “Nielsen,” is a relatively new organization whose goal is, among other things, to speed up the adoption of alternative currencies.

Not that they’re being hasty about it or cutting corners.

It’s just that the existing system, wherein companies need to get accreditation by the Media Rating Council (MRC) has long been criticized for being overly lengthy and overly costly to the point where it effectively shut down the ability of any newcomers to challenge Nielsen. Newcomers generally being start-ups and all that. 

So the fact that the JIC is the new sheriff in town is the real news here.

Why It Matters

The MRC will tell you that they are underfunded—members pay just $17K/year— not to mention understaffed— and that their vetting process is incredibly thorough which is why it takes so long.

All of that is likely true, but it is also true that the status quo meant it was all but impossible to mount a successful challenge to Nielsen as an accredited player and that the lack of any sort of real competition led to a situation where the industry was ill-prepared for the shift to streaming.

The JIC is doing a world of good by providing a rationale for companies like Paramount to start using alternative currencies. Not that they absolutely needed one, but being able to tell clients that an independent third party blessed something is always going to make your life easier.

But back to how we got here.

Nielsen has traditionally relied on panels to measure TV viewing. Other companies tried to introduce set top box data as an additional metric, but the pushback was always that none of the cable and telco MVPDs had a national footprint and that the two satellite companies did not have a representative audience. 

Streaming however, has been measured by ACR or automatic content recognition data from smart TVs. The issue there is that the major OEMs (Samsung, VIZIO, LG and Roku) all have their own data sets which they do not pool together. And so while the number of actual opted-in viewers across all four is well over 100 million, there’s been pushback that the data sets are too siloed… and pushback to the pushback that says the naysayers need to chill out, that while we will never get to the 1:1 measurement, probabilistic data from over 40 million smart TVs is a vast improvement over panel data from 40,000 households.

But mostly the issue is that television is an industry that does not like change.

Which means that the more organizations like the JIC can do to help make change possible, the easier it will be for companies like Paramount and iSpot to make it happen.

What you need to do about it

If you are an agency or a brand manager and you are not very familiar with newer forms of measurement and why they matter, you need to get on board. CIMM (Coalition for Innovative Media Measurement, which hosted a very thoughtful and informative conference this week) is a good place to start.

If you are a big media company, having different forms of currency to meet the needs of various types of clients is always a good idea. Diversifying your measurement portfolio is smart for the reason diversifying your investment portfolio is smart: you never want to have all your proverbial eggs in the same basket.

If you are the MRC, I feel your pain and I realize that you are in a hard place. But when the alternative to change is irrelevance, it sort of feels like you have no other choice. You’ve managed to give iSpot accreditation for their Ad Occurrence reporting. A way to fast-track them and other currency vendors like VideoAmp and Comscore should most definitely be on your road map.

2. Roku Gains A Beachhead In Britain

Roku is one of the dominant OEMs in the US television industry, through their licensed smart TVs, their own smart TVs and their dongles. 

They’ve made decent enough headway in both Mexico and Canada but Europe has been a continuing issue.

That may have changed this week thanks to a deal they’ve struck with UK chain Curry’s that will see the 288-store chain selling JVC-brand TVs that run the Roku OS

It’s just the latest salvo in the OS Wars, a conflagration which is set to be the industry's main battleground in the coming years. And, not coincidentally, the subject of TVREV’s newest Special Report.

Why it matters

Roku is one of the dominant players, if not the dominant player in the US.

Depending on whose stats you look at, they own somewhere close to a third of the market here. 

But the US is an outlier globally. 

To begin with, the market is fairly tightly sewn up, whereas Europe and the Global South still have lots of untapped potential. 

Second, there are strong local players in the US like Roku and VIZIO. 

And Google, which has deals with Chinese OEMs like TCL in Europe, has been relatively low profile in the US.

So there’s all that, and it is why Roku still has hopes of penetrating the European market, especially given that the FAST market is still quite nascent in Europe compared to the US.

As it is, the OS Wars promise to largely be a battle between CE manufacturers like LG and Samsung versus internet giants like Amazon and Google. So Roku is somewhere in the middle—they are at some level a CE manufacturer, but they also can lay claim to being a digital challenger.

What Roku has going for them though, is their very simple interface.

Roku’s UX is modeled on a smartphone. There is a grid of tiles, each representing an app, which is very different from their competitors, whose UX is centered on their FAST service and thus bears more of a resemblance to the home page of Netflix, Max or Hulu.

In researching the report, I learned that Roku’s interface was designed at a time when streaming was still fairly new and users went in knowing exactly what they wanted to watch—the phone-like grid makes it easy for them to find the app they are looking for.

Later interfaces were designed for viewers for whom streaming was their primary viewing experience and who went in looking for something to watch. Thus, they present an array of choices, including recommendations, to help with that journey.

As to which experience is “better,” that really depends on the viewer and how they watch TV. I suspect for most people, both versions will have utility depending on their mood or viewing companions.

But back to Europe, a market where Roku has struggled to gain a foothold.

While it’s too early to tell how much of an impact the Curry’s deal will have—much depends on placement, in-store promotion and the like—it is proof that Roku has not yet surrendered its goal of expanding beyond North America.

What you need to do about it

If you are Roku, you know what to do. Much of your success has come about because of the deals you struck with various retail chains and your prowess at in-store promotions and displays.

Just don’t assume the UK market is identical to the US. There are major differences, and learning and acknowledging those differences will be the key to your success.

If you are Samsung, LG, Amazon and Google, don’t take Roku for granted. 

They are the Little Engine That Could of the OS Wars, an unlikely success story. And while much of their success is attributable to the mistakes of their competitors, e.g. Apple keeping prices in the stratosphere, it wasn’t all just dumb luck. So eyes wide open.

If you are a UK consumer and you’re in the market for a well-priced new TV, there’s a reason Roku sets are so popular in America.

Alan Wolk is co-founder and lead analyst at the consulting firm TV[R]EV. He is the author of the best-selling industry primer, Over The Top: How The Internet Is (Slowly But Surely) Changing The Television Industry. Wolk frequently speaks about changes in the television industry, both at conferences and to anyone who’ll listen.