The Gyngell Theory - SVOD throws out ratings

James McGrath
By James McGrath | 27 February 2015
David Gyngell, Nine Entertainment CEO.

Nine Entertainment Company CEO David Gyngell spent a fair chunk of time talking about subscription video on demand (SVOD) service Stan yesterday, not solely because Nine has a 50% stake in it, but because of what he calls “the Gyngell Theory”.

Speaking at the presentation of Nine's half-yearly results, he outlined his theory - which is that the plethora of catch-up services, streaming services and other options TV watchers have these days is not responsible for a migration of audiences.

In fact, he says, the migration talk has been overplayed. Instead, his point is that they've affected the OzTAM ratings in the short term.

“Can it [SVOD] be cannibalising the OzTAM boxes in the short-term? The team at OzTAM will hate me saying this, but yes, it could be doing some of those things,” Gyngell said after yesterday's presentation.

“This is a Gyngell theory and not a fact, and it's that when you've got three and a half thousand people with set-top boxes sitting at home sending data back to the ratings system they tend to be interested in television and television products.

“There hasn't been a period where there's been a free catch-up on their iPhone, on your Chromecast, on your AppleTV, so I think some of the numbers could be thrown out.”

His theory is pretty simple. That the people who invite an OzTAM meter into their homes have to be pretty ahead of the curve and interested in TV, and, therefore, would be interested in exploring different options for watching content.

For example, the first episode of tentpole mini-series Gallipoli got about 1.1 million metro viewers, which is an okay outing for a series which is both pretty good in terms of content and heavily-promoted by the network.

Then Stan announced the whole run would be immediately available on the platform the next week. Subsequently the ratings for the show collapsed. That led people, including us, to speculate that Stan was behind the drop.

Gyngell dismissed the theory yesterday that Stan's showing of Gallipoli was behind the decrease directly, saying Stan simply didn't have enough users to affect the show in any great way.

He said if the people with OzTAM meter in their homes elected to watch the show on Stan instead of on linear TV, then that would be reflected in the ratings data.

However, OzTAM CEO Doug Peiffer told AdNews yesterday that he refuted the theory.

“That's a Gyngell theory,” Peiffer said.

He said the theory presupposes that people with OzTAM panels in their homes are especially excited about TV.

“We select households not on whether they like TV or whether they're ahead of the curve, but rather it's more of a random sample of the Australian population,” Peiffer said.

“I don't think you can say they're ahead of the curve, and I don't think you can say because they have the [meter] in their homes that they're particularly interested in the future of TV and particularly interested in streaming services.”

Peiffer said an OzTAM audience of 100,000 people would equate to roughly 60 households which have OzTAM meters in them.

Therefore if 60 households tune into Stan to watch Gallipoli instead of Nine, then it would appear Gallipoli had lost 100,000 viewers overnight instead of a grand total of 60 households.

“Streaming has focused me and the management on needing to get OzTAM across the data better and, again, we're followers in this industry not ground-breakers like in the UK and the US,” Gyngell said.

“The time has come, and I've spoken to my peers and we're in general agreement, that we do have to understand the data and the first quarter of this year is going to be a real watershed on understanding where the data is and who's watching when.”

Elsewhere, Gyngell said that advertisers had not yet evolved their thinking beyond overnight figures.

“It's about educating the market on what the data is and about being patient when you start to have conversations too - because we can be only five days into a seven day catch up cycle, so you don't get the real number,” Gyngell said.

“A show like The Block will be doing 800,000 overnight , you'll get 70,000 to 80,000 on personal video recorders (PVRs), and then another 100,000 on streaming.

“You've just got to make sure you're managing the metrics and telling your advertisers not to look at the overnight ratings before making a decision on that show. It's about looking at the catch up numbers and the streaming numbers.”

* An earlier version of this story referred to OzTAM meters as panels. The story has been updated to reflect to correct terminology.

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