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MEDIA FRAGMENTATION
AND THE COEXISTENCE OF
MARKET INFORMATION
REGIMES
    Simultaneous use of two television ratings systems
    in India

 Media Management and Economics Division, AEJMC 2012, Chicago
                Harsh Taneja, PhD Candidate
            Media, Technology and Society Program
                   Northwestern University
                 harsht@u.northwestern.edu
                       Twitter:@harsht
Study Overview
Question: Are markets for audience measurement natural
monopolies?

Approach: An ethnographic study of ratings producers and
consumers in a media market with two television ratings providers

Contribution: Identification of conditions wherein multiple
providers can exist in media markets
Audience Measurement Markets: Extant View
• “Market Information Regimes”          (Anand and Peterson, 2000)

  • Convert the audience into an “institutionally effective” coin of
   exchange between advertisers and media owners (Ettema and Whitney,
   1994)

  • Provided by a neutral third party entity for unbiased estimates
  • Outcome of consensus between various actors involved
  • Huge costs of establishment

Audience Measurement Providers tend to be natural
 monopolies – e.g., Nielsen television ratings in the US
  • Often contested, but contests reinstate a monopoly               (Buzzard, 2002)
Contests between Audience Measurement
Firms
         Changes in
                                    Need to Adapt
         Audience
                                    Measurement
         Behavior



        Entry                       Resistance by
        of              Compete
                                    Existing Firm (s)
        Competitors



                        Single
                      Measurement
                        Provider
                       Reinstated
Audience measurement industry not a natural
monopoly
• Ratings markets have provided “opportunities for
 product substitution” (Furchtgott-Roth, Hahn, & Layne-Farrar, 2007)
 • Multiple players can thrive if market participants support
 • Single provider situation not attributable to market failure


• Consequences of increasing media fragmentation
 • A larger subscriber pool     (Taneja & Mamoria, 2012)

 • Differing needs of different stakeholders
 • “A basket of currencies” than a single measurement provider
   (Napoli, 2011)
What Has Not Been Explored?
   When data from multiple measurement systems
    are in circulation, how do participants make use
    of information from competing systems?
    ◦   Do content and advertising functions, niche vs mass
        outlets etc. use ratings differently?
   Reason: Most studies focus on an institutional
    level of analysis
    ◦   Need to focus at a the level of individuals and
        organizations who use audience information
Television Audience Measurement in
India
   India has 120 million pay TV households and 650
    channels ( from 1 in 1991 and 50 in 2001)
   Before 2005: Weekly Ratings by TAM ( a Nielsen
    Subsidiary) the only ratings service in the market
   2005: Entry of aMAP as an overnight ratings service
   2005 -2012: Both TAM and aMAP circulate in the market
   Systems similar on all aspects except frequency of
    reporting
Method: Semi Structured Interviews
   15 Interviews with Industry Professionals
    ◦
        Programming Function
         7 Research Managers at Broadcasters
    ◦   Advertising Function
         4 Media Planners and Buyers
         1 Advertising Manager at a consumer goods company
         2 Advertising Sales Professionals
    ◦   Measurement Service Providers
         2 Business Managers ( 1 each at TAM and aMAP)
   Interviews in two markets that contribute to most
    of the nation’s media production as well as
    advertising spends
RQ1a: Which organizations subscribed to
either TAM, aMAP, or both ?
   TAM unequivocally accepted as the advertising currency
    ◦
        Used by all broadcasters and advertising agencies


   aMAP used by select broadcasters in programming
    functions alone
    ◦   Initial uptake by new broadcasters who used it during launch
    ◦   Some broadcasters lapsed, others continue to use it
    ◦   Not subscribed by majority of agencies
RQ1b: Why certain organizations subscribed to
aMAP, when TAM was recognized as the sole
industry currency?
   aMAP used exclusively to boost performance on TAM
    ◦   Overnight data which helps them react faster
    ◦
        Make changes in schedules, intensify promotions
    ◦   Have devised ratios to convert TAM to aMAP
   Other players were unable to deal with divergence; resisted
    a second system
    ◦   Executives have informal access to aMAP through peers
RQ2: How did executives in programming and
advertising functions use either or both TAM and aMAP
in their jobs?
                                      Programming Network
    Advertising Trading                    Performance
 TAM     sole system used aMAP    Subscribers   to TAM and
 numbers good to know              aMAP
 Deals  made weeks in advance      • Use aMAP to improve
 Last minute alterations not         performance on
                                      TAM
  viable - full inventories
                                    • Access restricted to research
 Lack of market maturity for
                                      teams
  dealing with daily numbers       Subscribers   to just TAM
                                    • Gain informal access to aMAP
                                     numbers
RQ3: Did each of TAM and aMAP perceive
the other as direct competitor ?
• TAM and aMAP did not perceive each other as competitors, but
  as complements
• TAM viewed aMAP as a complementary system that broadcasters
  used as an additional research tool
  • Saw no need to convert to an overnight ratings regime
• aMAP saw newer opportunities in Set Top Box based
 measurement as market was digitizing fast
Discussion: Coexistence of Audience
Measurement Providers

1.Market fragmentation catalyzed the entry of a
parallel system
2.Market supported multiple audience measurement
systems as they met different stakeholder needs
   • Advertising currency not the sole use of ratings
3.Systems differentiated on dimensions other than
method of data collection
   •   Frequency of reporting in this case
Conclusion

 Highly fragmented markets can
 support multiple audience
 measurement systems if they serve
 distinct institutional interests
QUESTIONS AND
COMMENTS


        Harsh Taneja, PhD Candidate
    Media, Technology and Society Program
           Northwestern University
         harsht@u.northwestern.edu

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Media fragmentation and the coexistence of market information

  • 1. MEDIA FRAGMENTATION AND THE COEXISTENCE OF MARKET INFORMATION REGIMES Simultaneous use of two television ratings systems in India Media Management and Economics Division, AEJMC 2012, Chicago Harsh Taneja, PhD Candidate Media, Technology and Society Program Northwestern University harsht@u.northwestern.edu Twitter:@harsht
  • 2. Study Overview Question: Are markets for audience measurement natural monopolies? Approach: An ethnographic study of ratings producers and consumers in a media market with two television ratings providers Contribution: Identification of conditions wherein multiple providers can exist in media markets
  • 3. Audience Measurement Markets: Extant View • “Market Information Regimes” (Anand and Peterson, 2000) • Convert the audience into an “institutionally effective” coin of exchange between advertisers and media owners (Ettema and Whitney, 1994) • Provided by a neutral third party entity for unbiased estimates • Outcome of consensus between various actors involved • Huge costs of establishment Audience Measurement Providers tend to be natural monopolies – e.g., Nielsen television ratings in the US • Often contested, but contests reinstate a monopoly (Buzzard, 2002)
  • 4. Contests between Audience Measurement Firms Changes in Need to Adapt Audience Measurement Behavior Entry Resistance by of Compete Existing Firm (s) Competitors Single Measurement Provider Reinstated
  • 5. Audience measurement industry not a natural monopoly • Ratings markets have provided “opportunities for product substitution” (Furchtgott-Roth, Hahn, & Layne-Farrar, 2007) • Multiple players can thrive if market participants support • Single provider situation not attributable to market failure • Consequences of increasing media fragmentation • A larger subscriber pool (Taneja & Mamoria, 2012) • Differing needs of different stakeholders • “A basket of currencies” than a single measurement provider (Napoli, 2011)
  • 6. What Has Not Been Explored?  When data from multiple measurement systems are in circulation, how do participants make use of information from competing systems? ◦ Do content and advertising functions, niche vs mass outlets etc. use ratings differently?  Reason: Most studies focus on an institutional level of analysis ◦ Need to focus at a the level of individuals and organizations who use audience information
  • 7. Television Audience Measurement in India  India has 120 million pay TV households and 650 channels ( from 1 in 1991 and 50 in 2001)  Before 2005: Weekly Ratings by TAM ( a Nielsen Subsidiary) the only ratings service in the market  2005: Entry of aMAP as an overnight ratings service  2005 -2012: Both TAM and aMAP circulate in the market  Systems similar on all aspects except frequency of reporting
  • 8. Method: Semi Structured Interviews  15 Interviews with Industry Professionals ◦ Programming Function  7 Research Managers at Broadcasters ◦ Advertising Function  4 Media Planners and Buyers  1 Advertising Manager at a consumer goods company  2 Advertising Sales Professionals ◦ Measurement Service Providers  2 Business Managers ( 1 each at TAM and aMAP)  Interviews in two markets that contribute to most of the nation’s media production as well as advertising spends
  • 9. RQ1a: Which organizations subscribed to either TAM, aMAP, or both ?  TAM unequivocally accepted as the advertising currency ◦ Used by all broadcasters and advertising agencies  aMAP used by select broadcasters in programming functions alone ◦ Initial uptake by new broadcasters who used it during launch ◦ Some broadcasters lapsed, others continue to use it ◦ Not subscribed by majority of agencies
  • 10. RQ1b: Why certain organizations subscribed to aMAP, when TAM was recognized as the sole industry currency?  aMAP used exclusively to boost performance on TAM ◦ Overnight data which helps them react faster ◦ Make changes in schedules, intensify promotions ◦ Have devised ratios to convert TAM to aMAP  Other players were unable to deal with divergence; resisted a second system ◦ Executives have informal access to aMAP through peers
  • 11. RQ2: How did executives in programming and advertising functions use either or both TAM and aMAP in their jobs? Programming Network Advertising Trading Performance  TAM sole system used aMAP  Subscribers to TAM and numbers good to know aMAP  Deals made weeks in advance • Use aMAP to improve  Last minute alterations not performance on TAM viable - full inventories • Access restricted to research  Lack of market maturity for teams dealing with daily numbers  Subscribers to just TAM • Gain informal access to aMAP numbers
  • 12. RQ3: Did each of TAM and aMAP perceive the other as direct competitor ? • TAM and aMAP did not perceive each other as competitors, but as complements • TAM viewed aMAP as a complementary system that broadcasters used as an additional research tool • Saw no need to convert to an overnight ratings regime • aMAP saw newer opportunities in Set Top Box based measurement as market was digitizing fast
  • 13. Discussion: Coexistence of Audience Measurement Providers 1.Market fragmentation catalyzed the entry of a parallel system 2.Market supported multiple audience measurement systems as they met different stakeholder needs • Advertising currency not the sole use of ratings 3.Systems differentiated on dimensions other than method of data collection • Frequency of reporting in this case
  • 14. Conclusion  Highly fragmented markets can support multiple audience measurement systems if they serve distinct institutional interests
  • 15. QUESTIONS AND COMMENTS Harsh Taneja, PhD Candidate Media, Technology and Society Program Northwestern University harsht@u.northwestern.edu