Viewership Is Up but Ratings Are Down—What’s Going On?

Our show is especially popular among imaginary viewers

There's a problem with the metric that TV networks are asking everyone in the media to look at when it comes to viewership: At least from an advertising perspective, it includes unicorns.

This season more than ever before, networks are bragging about live-plus-seven (L+7, or L7) viewership, the metric Nielsen uses to measure everybody who watched the show on DVR within a week of the original air date. The increases that L7 shows are staggering. Even well into the season, The Good Wife got 50 percent more viewers in the demo last week when you count people using DVRs; Sleepy Hollow recently saw a bump of 80 percent.

"L7 and C7 are the metrics that more accurately account for how viewers watch our shows and how we get paid for our programming—both in advertising and content licensing," CBS president and CEO Les Moonves told Variety in September when the company trumpeted several upfront deals it had signed based on C7 metrics. So why do shows ever get canceled?

Well, Moonves was blurring a line there—L7 measures viewership; C7 measures ads actually watched.

The reason this is annoying, of course, is that hardly anybody watches ads on DVR.

Sam Armando, svp, director at Starcom, says he understands why the metric gets tossed around by TV makers, but it doesn't have anything to do with him. "It’s giving the networks an idea of how many people are watching their show—of course, they’ll be interested in how many people are exposed to it," he said. "But L+7 is irrelevant because it doesn’t reflect the viewers who watch our advertisements. Look, whether [a metric] inflates—which, in this case, L7 does—or deflates, what we need to report to our clients is who’s watched their ads up to three days."

To some extent, this has to do with the dual revenue streams that power television: advertising and distribution fees from cable companies and satellite operators. L7 can be a way of telling those distributors how much viewers value their product. (And, in cases when networks own shows, it can gauge future interest on, say, Netflix or Hulu.)

But it can also obscure the issue at hand for advertisers, who see numbers spun hard for everyone who reports on the industry. "In the most recent week of L+7 data," said a recent release from ABC, "S.H.I.E.L.D. shot up 81 percent in adults 18-49 over its L+SD [live-plus-same-day] number (+1.3 rating points—from a 1.6 rating to a 2.9 rating) to deliver the series' biggest-ever playback lift."

Let's be clear, here: Nobody who buys ads on Agents of S.H.I.E.L.D. is paying for a 2.9 rating.

The only reason Nielsen ratings exist in the first place is so that advertisers have a third party who can tell both brands and networks who's overpaying and who's underpaying. So from the outside, it can look very strange when some shows get canceled despite apparently huge ratings and some shows get renewed despite comparatively small ones. Fox's Red Band Society, for instance, posted gains of 82 percent and then 73 percent in its first two consecutive episodes—the final numbers, by any standard, were huge. Mulaney, too, saw a bump of 30 percent in its debut frame, 34 percent in its second, and still gets enough demo viewership to scrape by above a 1 rating, when you include timeshifting.

Of course, L7 isn't even a metric the networks themselves value much internally. Mulaney was canceled very quickly this season because ultimately people who skip your paying customers' advertisements aren't worth a lot of money, even if there are a lot of them. Red Band, too, is all but certain to be canceled.

Networks, too, have been pressing for a change to C7 from older C3 ratings, which measured ad delivery on DVRed shows for three days. It's a real metric, but it's of limited value if you're selling, say, a movie that opens on Friday. Sunday evening deliveries of your advertisement aren't going to do much for opening weekend. Moreover, Armando sees the shift to C7 as simply a way to stave off secular viewership declines on television—something the industry has long feared. "I think initially it started with the result of audience fragmentation—audiences were still there, and they were spread out all over the place," he said. "Now we’re seeing PUTs (easy one: People Using Television) down, we’re seeing audience erosion. I hesitate to say that because it far exceeds any other video platform, but the fact is it’s down just a tad."

Mind you, everybody spins. It's just that from an advertiser's perspective, there's work to be done. "I think what's wasted is the time that we’re talking about these metrics that don’t do it, whether it’s L7, or moving from C3 to C7," Armando said. "The more time we talk about moving from three days to seven days, the less we talk about how to effectively measure cross-platform. A lot of networks are saying C7 is a big step forward; frankly, it’s just picking your foot up and putting it right back down. We have all the technology to avoid advertising in front of us, and yet what we want to talk about is moving from C3 to C7."