With Rentrak acquisition, comScore closes in on Nielsen

“Together we have an improved ability to deliver what our clients and the media industry have long been asking for — a comprehensive cross-platform measurement currency that accounts for all of the ways in which content is consumed, whether that viewing happens on live or time-shifted TV, video on demand, desktop, mobile, over-the-top devices or in the movie theater,” said comScore CEO Serge Matta and Rentrak CEO Bill Livek in a joint statement.

It’s a clear shot across the bow of Nielsen, which is the dominant player in TV measurement but has been criticized by an increasing number of media companies that it doesn’t adequately measure viewing of TV content on digital platforms.

“The industry has been waiting for Nielsen, waiting for Nielsen, waiting for Nielsen — that is what’s holding OTT and TV Everywhere up,” said Alan Wolk, senior analyst at The Diffusion Group. “The networks don’t want to go full bore [into streaming video] if nobody is going to be counting those views.”

The race to build a new “currency” has far-reaching consequences. Studios and networks would have a better idea of how their shows are performing, which means a better hand at the negotiating table when talking distribution with networks (including streaming services like Netflix) and pay-TV distributors.

The pay-TV guys, meanwhile, could use a better measurement system to build better apps than the ones that exist today. Consumers might be more interested in authenticating to a TV Everywhere app from a Time Warner Cable or DirecTV if those apps offered the same features and functionalities found on apps like Netflix. “It’s their game to lose,” said Wolk. “They have millions of customers already, all they have to do is convince them to download an app.”

And for advertisers, it would simplify the buying process. “It brings everything closer to apples-to-apples,” said Alex Kalluf, senior director of intelligence at Figliulo & Partners. “It’ll provide a comparable measure across channels so you know which is giving you more in relation to each other.”

Nielsen, for its part, has been working on a “total audience measurement” system, which would be able to provide a rating for viewership across both linear TV and digital. It should be ready by the end of the year, according to comments made by Nielsen’s global president Steve Hasker at an Advertising Week event earlier this week.

The company also followed comScore’s announcement with one of its own, about a deal with CBS to track desktop and mobile-app viewing on live and on-demand content on the broadcaster’s CBS All-Access streaming service. This, combined with other digital measurement products offered by Nielsen — the Nielsen Television Index measures viewing on connected TVs, for instance — will allow Nielsen to add digital viewing to its existing three-day, seven-day and “average quarter hour” TV rating services.

Of course, Nielsen still has a wide lead in the TV business, which pulled in $82.5 billion in ad revenue in 2014, according to Nielsen. The company has a current market value of $16.2 billion and did nearly $6.3 billion in revenue last year. Comparatively, comScore’s current market cap is $1.8 billion with $329 million in 2014 revenue and Rentrak’s is $820 million and $103 million in 2014 revenue. (Both comScore and Rentrak saw a boost in market cap following the acquisition announcement.)

But with the entire industry getting increasingly impatient, Nielsen can’t rest on its laurels for too long. “If [Nielsen] can get their act together by December or January, they don’t have a lot to be worried about,” said Wolk. “Just because it will take a lot to unseat them from where they are.”

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