Category Confusion: Nielsen, Gartner, The Federal Census Bureau, and You!

Aaron Smith has a very interesting post over at Asmedia titled, “Hollywood’s Web Shows: The Future of Television”?

In his introduction, he references a Nielsen report. At first glance, the report appears to be evidence that would back the executive point of view (as presented by Doug):

“Even with all that we (the technically savvy internet user) believes is occurring online, the last six years show that it just isn’t happening”.

Aaron’s entry is insightful and helpful (as usual).

That said, I do think that Aaron’s preliminary introductory analysis falls prey to the dangers of conventional generic reporting (in this case by Nielsen). Initially, I read the report summary the same way. What caused me to dig deeper was the fact that my reading of the Nielsen report seemed to fly in the face of other statistics. Upon closer investigation, I realized that this appears to be yet another case of what I call “Category Confusion”.

Like Aaron, I mistook Nielsen’s use of the phrase “traditional TV” to mean broadcast TV. Yet Nielsen’s use of the phrase appears to include broadcast TV, Cable, satellite, and possibly even DVD; all within one large group. Nielsen’s footnote describes their use of traditional TV to be “live viewing plus any playback viewing”.

The generic categorization of competing distribution channels as presented in the report is not overly helpful in evaluating current media patterns. In this case, it may even be detrimental because a casual reading of the report reinforces traditional old-media thinking while at the same time failing to contribute all that much toward an accurate, in-depth evaluation of the existing media landscape.

This is unfortunate. Nielsen could do better. I believe they should do better. For instance, this report could have analyzed the trends of broadcast TV as they relate to and are contrasted with: Cable, Netflix, DVD in general, mobile viewing, online viewing, gaming, etc. This would be very interesting and helpful. However, I do not think that this type of report is likely to be published to the public by Nielsen.

You may ask, “Why not?”

I believe the answer is that the conclusions presented would not be favorable to or for broadcast television as well as...Nielsen.

Before we move on to Gartner, there is another report Aaron linked to from Nielsen. This report appears to have a tendency to leave victims in its wake as well.

The title is, "Nielsen: Viewers Prefer TV set to Internet". The first paragraph reads:

"When asked, 94% of adults in the U.S. who subscribed to cable or satellite television said they preferred to watch television content on their televisions sets as opposed to via the Internet."

Nielsen's report pits "television sets" in a mutually exclusive death match against the "Internet". However, this is not a cut and dried "either" "or" scenario.

This brings up the question, "What is a "television set"?

I too prefer to watch my media from the comfort of my couch. However, my "television set" is a 720p projector. All my media, whether it be DVD's from Netflix, streaming video from Netflix/broadcast networks, streaming music from Pandora, Afterworld from Vuze, etc., etc. can be viewed from the best seat in my house in a home theater like setup.

If I want to view my content or play PC video games (with my wireless 360 controller) while working out on my elliptical, I can. If I want to browse the net and read technology using voice recognition from Vista while I work out, I can do so.

If I want to view video on the go, I can. I have many options available to me but I still prefer to watch from the comfort of the couch. While this is the nicest and most enjoyable experience, this doesn't mean that I don't use and very much enjoy the other options available to me as well.

Nielsen's report summary states, "'With so many viewing options now available via digital technology, it's more important than ever to understand how people are consuming media,'" said Susan Whiting, exec VP at The Nielsen Company".

How ironic!

I believe that I would be in the 94% who prefer media from the best seat in the house. However, my "Television Set" has changed dramatically and from it I am able to exercise all the viewing options referred to in the quote above. Unfortunately, Nielsen's old categories and use of old-media terms prevent them from truly understanding how I (a 2.0 viewer) consume media.

Unfortunately, Nielsen appears to still be stuck in the past and locked into a certain old-media type mindset. I think they need to rethink categories and update their terminology to match the existing landscape. As a side note, I believe that Comscore (mentioned in Aaron's post) does a much better job at capturing the consumptive patterns of the 2.0 viewer.

Gartner:

The report summary we are looking at from Gartner is titled, “Gartner Survey Shows Consumers Predominantly Using the Internet for Email and Search”.

This report title and summary appear to indicate that email and search are mutually exclusive to "internet video" and "social networking". I think the report fails to understand what the internet is and how email and search relate to applications like "internet video" and "social networking".

Without search it would be hard to access the content that is on the internet.

Though the amount of channels on TV has greatly increased, the viewer is still able to “surf” through available channels to try to find content they can settle down with. Not so the internet. With the internet there are so many different websites to choose from you can’t just change the channel; you must engage in search (though there are a few websites like Stumbleupon that let you “surf” the web without directly engaging in search).

“Search” for the internet is similar to switching “channels” on a TV. They are both services that connect users with content. Yet, switching channels for the TV and searching on the Internet, are not ends in and of themselves.

As with search, the same with email. Without email, there would be no standard, universal method for communication on the internet. Without email it would be hard to communicate between social applications.

Search and email are not mutually exclusive to either "internet video" or "social networking". I believe that many people perceive search and email to actually be the internet itself. Content like "internet video" or services like "social networking" are seen as separate from the network/internet that connects users with content.

I use the internet (network) to acquire content or services. The primary tools at my disposal are email and search. Therefore as internet usage increases and new content abounds, search and email will increase as well.

These observations about search and email make the following statement in the Gartner summary rather anticlimactic:

“Despite the huge growth in new applications such as Internet video and social networking, most consumers indicate the main reason for accessing the Internet is to use e-mail and gather information, according to a survey by Gartner Inc”.

When there is a huge growth in new applications, wouldn’t the need for search increase?

When there is a huge growth in social networking applications, wouldn’t email be all the more practical and pervasive?

In the Lord of the Rings, there was one ring that bound the rest. The Internet has at least two.

In analyzing reports like this, it is important to distinguish between basic services like email and search and the content and services they enable and support. A failure to do this results in category confusion. In the case of the broadcast corporate executive view described by Doug, this confusion leads to a “most people only use internet for email” type of fallacy.

An interesting report would delineate out these distinctions. It would also break down major content categories, major services, and basic tools as well as time spent on average for these various activities. It would examine these categories over time. It would describe how these major categories relate to one another. This would be more concrete than subjective opinion and be a more accurate gauge of the new consumer.

Census Bureau:

I believe the corporate broadcasting executive view as detailed by Doug is further maintained by filtering recent and new phenomena through a mesh of incongruent historical categories. The broadcast executive view of the Census Bureau charts (as outlined by Doug) are a good example.

Consider Netflix. Their company profile describes itself as:

“the world’s largest online movie rental service, providing 8.4 million members access to more than 100,000 DVD titles plus a growing library of over 12,000 full-length movies and television episodes that are available for instant watching on their PCs.”

Here are some more quotes from their page:

“If you stacked every movie Netflix ships (on average, 2 million DVDs a day) in a single pile, the stack would be taller than Mt. Everest within a week.”

“Netflix has more than 100,000 titles and more than 55 million DVDs total. Every three months, Netflix members rent more than 95% of the 100,000 titles in the Netflix library. On any given day, more than 46,000 of the 100,000 titles available at Netflix are in distribution.”

“Netflix members say they rent twice as many movies per month than they did prior to joining the service. Netflix members add 2 million movies to their Queues every day.”

Obviously NetFlix has used the web to make a significant difference in how viewers view their content. If it is true that Netflix members rent twice as many movies per month than they did prior, this is time away from broadcast TV."

Now here is the question, “What category do you put the NetFlix into?”

Most likely it would be in the product/service information category, if it was even categorized. Other examples are Blockbuster Online, Itunes, Vuze, torrents, etc. Viewers purchase, download, select, and acquire content via the internet and then view it completely separate of the internet. The internet becomes the means to obtain the content, which can then be viewed offline.

This type of internet activity is one which has a significant impact on viewer behavior. However, the Census Bureau categories are not able to give us insight into how that activity is changing. Its categories limit it to being able to give us some information about a very newly hatched and very much still emerging development. The streaming TV/Movie experience.

Further, I think the categories given by the report are self-limiting. I don’t think that most users consider Youtube or user generated content to be in the TV/Movies category.

Also, consider gaming. What category does the Xbox360 or the PlayStation 3 fit into? These console game platforms now use the internet. However, the gamer doesn’t make a conscious decision, “Hey, I am going to pull up the internet in my web browser so I can play my XBOX 360 game”. For many people, Internet or online activity is associated as something a user does from within a web browser.

With the increase of “always on” broadband connections, this is also true for a number of PC games and even MMORPG’s. A gamer buys the game, installs it, and starts to play. The internet and the game communicate behind the scenes. The gamer may not even think about the fact that they are online when they are playing the game.

Bottom line: Broadcast networks and primetime TV are not competing only against online streaming video. They are competing for their viewers time, attention, and ad views.

As I wrote in a different entry, cable increased channel and content selection. VCR’s and later DVR’s allowed viewers to skip commercials. Personal computers, internet and sites like youtube, myspace, torrent sites, and mobile devices all further diversified the market. Suddenly, media consumers can choose what they watch, when they want to watch it, and can do so wherever they choose.

Video games are becoming more popular and the viewer is now free to spend their limited time on what interests them most. DVR is estimated to have ~25% market penetration and it looks like this may increase with the recent Cablevision ruling.

TV time does continue to increase, but it does so at the expense of broadcast TV.

This brings us to…

You:

Looks like we need:

1) More analysis,

2) Additional reports that are detailed and nuanced toward accurately measuring new activities and content, and

3) your comments!