Will exclusivity over the ratings increase viewers of national televisions?

Digitalization had resulted in national televisions losing portion of their viewers on the account of foreign channels. Nielsen is the company selected to measure ratings, notably with the use of so-called “peoplemeters”. Now, ratings data can be bought by televisions and marketing agencies through the newly established body called the Industry Committee. Here, we analyse the extent to which this would help televisions manage their programme contents and thus regain their viewers.

Written by: Ljubisa Arsik

Although digitalization of televisions was expected to increase their viewers and popularity, the new technologies negatively affected the ratings of domestic televisions with national concession. Official data show that all five televisions, i.e. TV Sitel, TV Kanal 5, TV Telma, TV Alfa and TV Alsat-M, have lost the trust of 3 to 4 percent of the audience. Why have their ratings dropped? Factors and reasons thereof are abounding, but – in general – it is primarily due to low quality of programme contents broadcasted by domestic televisions compared to foreign televisions, whose number has increased with the digitalization process with all operators offering up to hundreds of channels, such as MaxTV, BoomTV and the cable operators Blizoo, Telekabel…

FOREIGN CHANNELS PROFIT AT THE EXPENSE OF DOMESTIC CHANNELS

It is exactly specialty, i.e. uniform programme channels, such as movie, music, sports, documentary, children channels that are characterized by remarkable ratings, in particular due to the law-stipulated obligation for these channels to ensure subtitles in Macedonian language. Hence, digitalization facilitated access to such world-renown televisions, with the subtitles rendering them more interesting to be chosen by the audience. On the other hand, one must not undermine the emergence of regional television services, such as Al Jazeera or N1, which are most certainly joining the race to win over portion of the Macedonian audience.

Goran Gavrilov, owner of Radio Kanal 77, inferred that digitalization caused domestic televisions with national concession to lose both money and audience. “At the expense of domestic televisions, foreign channels profited. This would become more prominent knowing that the next step in digitalization is emergence of global internet televisions such as, for example, Netflix (implying monthly subscription to access to its channels) which is available also in the Balkans, streams in ULTRA HD and is slowly becoming exclusive with respect to movies and series”, analyses Gavrilov.

Furthermore, straightforward comparison of figures easily provides the conclusion on the dominant position of foreign channels. Notably, the Macedonian audience, considered to be TV-addicted at the rate of high 95% percent, spends large portion of their leisure time in front of TV screens. However, viewers’ appetite cannot be satisfied merely with an offer of dozen televisions. That is why foreign channels, carried in hundreds at certain operators, become increasingly popular. Atanas Kirovski, director at TV Telma, offered an interesting analysis concerning the drop in viewers.

In his opinion, domestic televisions primarily choosing to broadcast programme of diverse contents cannot compete against world-renowned channels, it is as simple as that. “First and foremost, not a single state in the world allows operators to air hundreds of channels, so their number must be limited. Furthermore, how could a domestic culinary show compete against shows broadcasted on the renowned channel 24 Kitchen? Or, how can a domestic television purchase the right to broadcast sports events, for example, football championship, and compete against big channels such as Arena Sport or Sport Club? And you want to convince me that this is normal liberalization? Is there a state that can afford this? Additionally, the Agency for Audio and Audio-Visual Media Services, as the state regulator, does not monitor, nor care what contents and at what time is aired on foreign channels, unlike the domestic televisions, which are practically persecuted with prohibitions and penalties”, explains Kirovski.

Fact is that digitalization was rushed, with poor quality, and at times when the media market was already overcrowded. It is simple: we switched from analogue to digital signal, but nothing changed in terms of the offer. Although certain televisions are making attempts to increase their ratings, notably by introducing minimal changes; that is certainly not enough. In the aftermath of digitalization, domestic televisions with national concessions, including the public broadcasting service MRTV, maintained their traditional operation both in terms of own production and in terms of programme contents.

In this context, Dejan Georgievski from the Media Development Centre analysed that the media market is small: there is too little money and too many televisions. “In a situation of little funds, but many televisions, one cannot talk about sustainable market. That is why the media scene is as it is. That is why owners and editors are easily bribed and it is easy for them to cut the corners on professionalism. In Macedonia, televisions are impoverished and unable to invest in solid and expensive production, which, in turn, does not necessarily imply high ratings. Ultimately, that is why we have Turkish soap operas and Serbian reality shows”, says Georgievski.

The influence of the behaviour of young population that is becoming a trend and reduces television audiences must not be disregarded. On one hand, they favour foreign channels and dislike the domestic channels and, on the other hand, the Internet is their television. That is why, in much higher numbers, they use computers and mobile phones to watch certain television programmes, instead of classic TV sets. It is this audience that becomes user of Netflix or Pickbox, which enable internet access to their programmes for a monthly subscription of 300 to 400 MKD and offer exclusive and modern contents, in particular movies and series.

As of last year, the multitude of factors affecting reduced viewers of domestic televisions with national concession includes the audience’s language structure. For example, it is considered that televisions broadcasting programmes in Albanian language, although being aired regionally in Macedonia, Kosovo and Albania, at the very start have much greater market and viewers and thereby benefit from advertisements and money. Such competition on a broader territory implies that they must be more competitive and makes interventions in the programme content a necessity.

Finally, transition from analogue to digital format contributed certain rural areas, in particular villages and weekend settlements, to lack television signal. They used to have it simple: analogue antennas guaranteed around a dozen of channels, including the public broadcaster, private televisions with national concession, as well as regional and local televisions. This sufficed for some of them, but now they have fallen victims to modern technology.

According to the law provisions in effect, 50 percent of the programme aired by national televisions must include own production, both documentary and feature. Nevertheless, in the attempt to meet required percentages and in a situation of insufficient funds, they opt for poorly produced contents, which cannot compete against foreign productions. For example, portion of televisions are abounding in Macedonian folk tales, as the easiest way to meet the required quota, but teams working on such productions and final results thereof are unsatisfactory.

Some managers of television stations are aware that, in order to increase their ratings, they need to produce own programme and not any type of programme, but programme of high quality, which is expensive. For comparison, one episode of the worldwide popular series, such as Game of Thrones, costs up to five million euros – money that our televisions could only dream of. Then, new contents necessitate careful selection of airing timeslots and audience that would be interested in viewing such contents. Televisions, in particular the bigger ones (private televisions with national concession and the public broadcaster), need rating and viewer meters to convince them to be more decisive in creating new contents and properly presenting them before the audience.

IS IT POSSIBLE TO TAMPER WITH RATING FIGURES?

From 2007 onwards, the company AGB Nielsen is considered to be the most relevant rating meter. This world company measuring TV ratings through the system known as peoplemeter uses the most reliable and the most dependable method of viewer measurement. Peoplemeters are mounted on TV sets at households chosen to have their viewing habits monitored, i.e. upon a conducted annual research. The family in question is presented with a special remote control and each family member is assigned a number on the remote they need to press to register their presence on the peoplemeter and to confirm they are present in the room where the TV set is on.

Ratings of particular shows and timeslots are later used by marketing agencies in order to offer advertising space to clients, but are also utilized by the televisions to know the value of each advertising minute at each time of the day, as well as to know which programme is viewed or not.

In Macedonia, there has always been doubt in the reliability of ratings measured by Nielsen, whereby certain TV stations accuse of ratings being tampered with, while others are boosting for being the most viewed. And it goes on, in circles. But, is it really possible to tamper with ratings and favour particular programmes, i.e. televisions? Viewer rates are important, because they determine who gets what piece of the advertising cake. Slowly, world practices are being adopted in Macedonia – when advertising themselves, all large companies want to know the ratings of particular programme or timeslots when advertisements are aired. Peoplemeters can even produce precise measurements, expressed in figures, of how many viewers will see the advertisement.

It is only logical for private televisions with national concessions to fear losing their biggest clients, which have several million euros to spend, such as Henkel, Procter & Gamble, Coca-Cola, so they must rely on certain results concerning their viewers and anticipate flows of advertising money by relying on the ratings of their programme contents. Hence, they have no other choice but to trust Nielsen. As much as the results have been contested by particular televisions, under the current set-up of the system, Nielsen continues to be the single company measuring viewer ratings. This company was selected by the Industry Committee last October, after in September they announced the call obliging all participants to organize a presentation of their peoplemeter systems.

In addition to Nielsen, bids were submitted by Kantar Media and GfK, also renowned rating measurement companies, but they have bided much higher prices compared to Nielsen. Unofficially, Nielsen offered a price of 560,000 EUR annually for the entire operation. Rating measurements will be carried out in 520 households instead of 400, as was the case in the past. This means that the sample of 1,200 individuals in daily production will be increased. The figure of 520 households could be considered more relevant, although some have contested it as insufficient. Ultimately, it was the selection in terms of monitored viewers’ social status that imposed itself to be of key importance under the circumstances present in Macedonia.

Representatives of Nielsen reassured that even in the case of attempts to pay for higher ratings, as currently speculated to be the case with TV Sitel and with TV A1 in the past, the viewer measurement system would bring them to the surface. “Our system collects data from the peoplemeters installed at the households in the period from 2 to 6 am. Then, the equipment needs an hour to process and pack data collected in the last 24 hours. So, everything is automated and the human factor cannot influence this process. In practice, at 8 am we have the final ratings for the televisions and they are automatically and at the same time sent to our system and to our users”, claims Simeon Lavciski from Nielsen.

Speculations whereby certain televisions might be knowledgeable of portion of households included in the sample and may pay them directly to have their TV sets airing their programme continuously are difficult to be verified. In that, two things are disputable: first, even if the televisions have learned the identity of households included in the sample, which is top secret and known only to Nielsen, they might reach only several households whose number would not affect the final ratings, and second, the Nielsen system immediately detects atypical behaviour, i.e. it would record that the family in question, which had been flipping channels in the past, is currently viewing only one channel for hours, as if on purpose. Hence, representatives of Nielsen do not disregard the risk that somebody may try to pay for viewings, but they ascertain that safeguard mechanisms that are in place would detect such behaviour.

Darko Perusevski, former director at TV A1, recalled the times when peoplemeters showed that the televisions station he had managed held the highest ratings and when the television had been accused, primarily by TV Sitel and TV Kanal 5, of tampering with the ratings, just as TV Sitel is now suspected of doing the same. “We have never abused the system for viewer measurement, because that is almost impossible to do. Neither have I been offered to tamper with ratings, in the capacity of director, nor have I personally attempted to bribe or force somebody to favour TV A1. All we did was to make logical programme decisions and invest superhuman efforts to produce attractive programmes. This is a small market, with around 12 to 15 million euros which the companies spend on advertising in televisions at national level. Having in mind that this is an insignificant amount of money considering the high number of televisions, it would only be logical that the biggest share of advertising money ends up with particular televisions, with the lower portion thereof shared by the other televisions, and therefore those receiving smaller portion of advertising money hold grudges and accuse others of having tampered the ratings”, comments Perusevski.

Nowadays, when Nielsen figures indicate that TV Sitel has the highest ratings, other smaller televisions refuse to fully trust viewer figures. For example, Kirovski from TV Telma offers specific figures when he claims that Nielsen ratings, after all, are not relevant. “How can data show zero percent of viewers for the children series ‘Petko’ aired on TV Telma, when it is the most popular children show? On the other hand, I wonder how it is possible for Turkish soap operas, as well as Serbian music and entertainment shows, to dominate the ratings at all times? The answer can be found in the fact that AGB Nielsen operates as franchise of Nielsen from Belgrade and that is why, in my opinion, Serbian programme contents are favoured. If such shows sell advertising space in Macedonia, then Macedonian televisions would constantly purchase Serbia-produced contents and keep the Serbian market alive. Be that as it may, pursuit of such practices risks the entire broadcasting programme to be turned into gimcrack”, says Kirovski.

INDUSTRY COMMITTEE WAS ESTABLISHED TO INCREASE OBJECTIVITY OF THE RATINGS

Most interlocutors agreed that the sample monitored, i.e. the number of peoplemeters installed, may be sufficient when considered against the population size, but they contested the fact that peoplemeters have been installed at households of lower social status, i.e. poorer citizens, and therefore they cannot provide an accurate figure on viewer ratings, meaning the viewers monitored give primacy to programme contents of lower quality, given the fact that vast majority of the population is addicted to perpetual soap operas produced in Turkish and Indian language, which ultimately results in television offers of better quality viewed by citizens of better economic standing and education failing to attain higher ranking on peoplemeters.

Now, after Nielsen had been given this task again, changes are needed in terms of targeted viewers. However, installation of devices measuring viewing habits is pursued with difficulties as some people refuse to be obliged to continuously report their presence in front of TV sets, while others raise concern that such devises might also imply installation of bugs to intercept their communications.

Can the panel group be improved and how, i.e. is it possible to create an environment where all televisions will trust viewer ratings produced by Nielsen? To avoid suspicion and obtain insight into the ratings, the five national televisions, i.e. TV Sitel, TV Kanal 5, TV Telma, TV Alfa and TV Alsat-M, together with the public broadcaster MRTV, the Agency for Audio and Audio-Visual Media Services (AAVMS), acting as the state regulatory body, and marketing agencies appearing as users of the ratings for the purpose of offering advertising space to their clients, have established the Industry Committee. Members thereof include the five televisions and MRTV, each with one representative, two representatives from the Association of Marketing Agencies (MAAM) and one representative from the Agency, without the right to vote.

What role would this Committee play and will it succeed in addressing disagreements among televisions in terms of their ratings? To date, Nielsen conducted rating measurements and has spent up to half million euros annually and later sold the results to interested parties: the media, marketing agencies, big companies, with the ultimate result being how much it would sell its products. This means that the ratings could have been sold in an amount higher than money invested, but under the risk of earning less that it had spent. Now, with the Industry Committee being set up, Nielsen will know in advance that it would recover money spent and earn a profit margin. How? All rights related to the ratings, i.e. use and further sales thereof to interested parties, are held by the Committee, i.e. televisions predominantly comprising the Committee.

Thus, the amount of 560,000 euros would be secured by the Committee, televisions and marketing agencies. 80% of this amount will be paid by the five private televisions and the public broadcaster, while the remaining 20% will be covered by marketing agencies. After having paid Nielsen the full amount, the Industry Committee becomes the single holder of rights over viewer ratings. In that, televisions and marketing agencies that are members of MAAM would be the first to use the ratings, with everybody else, not represented in the Committee but wishing to obtain insight in television ratings, would have to pay directly to the Committee.

Unofficially, it has been announced that new televisions broadcasted in Albanian language and including occasional programme in Macedonian language, i.e. TV Shenja and TV 21, have expressed their interest to join this endeavour. If they truly wish to have their viewer ratings measured and use them, they will need to pay the Committee. Same is valid in the case of marketing agencies that are not members of MAAM, as well as big companies that independently decide when and where to advertise. Initially, the legal provisions stipulated that the Media Agency will be responsible for selecting the company tasked with viewer measurements, but later – following the reaction of media outlets – the Committee was established and entrusted with the right to select the company that would install peoplemeters.

Bisera Jordanovska, appointed head of the Committee, informed that the current set-up was agreed following major discontent expressed by certain televisions in respect to Nielsen’s method of operation and, allegedly, its inclination towards specific shows and TV outlets. Now it is expected that viewer measurements, under Committee supervision, will be more specific and objective, thus contributing to televisions creating contents of better quality and viewing, which would increase the ratings they have lost.

“First, we announced the call and selected the company GfK to design the panel group, i.e. to compile a list of households eligible to be included in the monitoring sample. This number accounts for around 5,000 households. Then we organized the selection for a company to conduct viewer measurements and chose Nielsen. Of course, the criteria were set high and instead of the initial 400 households, a total of 520 households will be selected now and will have rotating position in the panel for the next seven years, which is the period for which Nielsen was awarded the contract. We will be careful not to allow direct contacts between rating users and Nielsen, in order to prevent disclosure of information about the location of peoplemeters. As regards the amount owed to Nielsen, large share thereof, i.e. 80%, will have to be paid by the televisions, in two equal parts of 50%, where the first part will be linearly split by the televisions comprising the Committee, while the other 50% will be paid according to monthly ratings, i.e. televisions with higher ratings will pay a scaled larger amount, which is proportional to the possibility of benefiting from more advertisements. Furthermore, the Committee will sell the ratings to interested buyers, with the revenue collected to be invested, for example, in covering the fee owed to Nielsen, thereby actively reducing the amount set to be covered by the televisions”, says Jordanovska.

Application of simple math skills shows that if the fee share of the five televisions and MRTV owed to Nielsen amounts to around 450,000 euros, one television would have to pay 60,000 to 90,000 euros annually, depending on its viewer rating.

The question is whether this method of managing results from peoplemeters would ensure objective race among televisions? The other two companies that have submitted their bids on the call for rating measurement, Kantar Media and GfK, offered significantly higher prices compared to Nielsen, in an amount exceeding one million euros per year which, according to the Committee, cannot be attained under the Macedonian conditions.

Now, Nielsen’s operation and sample selection will no longer be pursued on measuring viewer rates only among socially disadvantaged groups, most of which live in Skopje. In other words, the sample of 520 households will now cover more than 2,000 participants in the panel group and will have to be adequately distributed geographically, but also in terms of its structure, primarily concerning the economic status of people included in the sample. Of course, the criteria concerning ethnic, education, urban, age and other background will still be in effect.

Quite rightly, interlocutors raised the question on how to address two suspicious developments that may emerge. First, how will Nielsen perform rotation of households? In practice, it is possible for a specific television to be favoured by means of rotation? Assuming that after six months, as part of the first rotation new households will have to be selected instead of the previous, will Nielsen be able not to rotate households for which data indicate they prefer one television, thus purposefully leaving them in the system as part of the panel group? Second, will the amount of 560,000 euros set by Nielsen remain the same, i.e. will certain televisions pursue illegal channels of payment in several hundred thousand euros, thus raising the fee collected by the company up to million euros annually, for which Nielsen will ensure high ratings only to those engaging in such payments? Irrespectively, hopes are that the Industry Committee will practice strong control and that it would be difficult for somebody to tamper the figures, as Nielsen representatives assured.

Marketing agencies as well expect that misunderstandings among televisions would be overcome. They do not have confrontations about the ratings because, practically, high ratings imply more viewers for the television, but they most certainly place great importance to viewer ratings being objectively measured so they would be able to offer adequate timeslots and televisions to their clients. The previous system of charging per second has been abandoned and replaced by a system with purchasing rating points. In practice, this means that the marketing agency purchases a given number of rating points at a particular television, depending on the funds intended for that purpose by the client. Once it has chosen the timeslot for advertising, the rating points are deducted until they reach zero, at which point the agency must buy new set of rating points. Viewer ratings attached to the timeslot determine the number of rating points deducted. This is a global trend in advertising since the companies, in particular big companies, want insight in the ratings, broken down to specific figures, i.e. how many viewers will see their advertisement during the timeslot chosen.

Saso Pesev from the marketing agency New Moment is president of MAAM and expects the number of six agencies that have purchased peoplemeter ratings so far to be increased to eight or nine. In that, marketing agencies’ share in the total amount owed to Nielsen will drop to 1,500 euros per month, which is an amount they can easily afford. “The right to purchase Nielsen ratings at this price is guaranteed for agencies that are members of MAAM, while the others will have to purchase them from the Industry Committee. It is important to notice that it becomes increasingly difficult to convince clients to advertise on a television whose ratings are not measured. As regards the reliability of viewer ratings, I have to say that we need to trust them. Ultimately, as much as we, as marketing agencies, try to convince our client where and when to advertise, they want to see peoplemeter results and assess whether our advice is right. Of course, in addition to data from Nielsen, we rely on our own audience polls and assessments, but cannot avoid peoplemeters”, says Pesev.

Nielsen will measure the ratings in the next seven years on the basis of 520 households that would be rotated, for a fee of 560,000 euros per year. This amount will be paid by televisions and marketing agencies, through the Industry Committee. This appears to be a belated effort in the world of digitalization, given the high popularity of foreign channels in Macedonia and, in the long run, it is highly unlikely that it would restore viewer ratings of domestic channels and remove soap operas and reality shows from their programme schedules.

(This article was developed in cooperation with the Metamorphosis Foundation, as part of the project “Digitalization of Broadcasting in the Republic of Macedonia”, financed by the Independent Journalism Programs from London.)