We have some more TV viewing statistics from this fall season's critical premiere week -- but not from the usual source. And while I'd be happy to discuss how the networks are doing, Rick Munarriz already did that. But his data came from the traditional source, and this is a new batch that obviates another burning question: Do we need Nielsen anymore?
These rankings came from TiVo (NASDAQ:TIVO), which collects user data automatically as its video-recorder customers flick through their TV stations via that digital set-top box. It's a far more reliable data source -- 100% correct, in fact -- than the old-school method of asking viewers to fill out forms by hand and mail them to Tampa.
Nielsen's newer methods rely on automatic collection, too, and they should be just as accurate, but they require additional hardware installation and will always rely on a smaller statistical sample than TiVo's entire customer base. (Just last month, Nielsen said it would increase its sample size to 37,000 households by 2011.) For TiVo, that's some 2.5 million data points from the grandfathered DirecTV (NYSE:DTV) TiVo users alone, plus 1.7 million direct TiVo customers.
And the Comcast (NASDAQ:CMCSA) partnership, which appeared lost in space for more than two years, has started to bear fruit now. Of the leading cable operator's 24 million customers, 59% already use some form of digital cable services, and management has told us that moving these guys on to DVRs is both a high priority and pretty easy to do. Soon, they'll all be TiVo boxes.
So TiVo sits on a gold mine of statistical data, adjusted for time-shifting in the new style of Nielsen itself. And even if this company went out of business tomorrow, all those non-TiVo digital video boxes have similar data-collection capabilities. If you can order pay-per-view or on-demand shows with your remote, your service provider knows what you're watching. That includes DirecTV, EchoStar's (NASDAQ:DISH) DISH network, digital cable from Comcast or Time Warner Cable (NYSE:TWC), you name it.
Maybe I left Nielsen to join the Fool at just the right time. Sorry, guys, but your services may not be needed much longer. CBS (NYSE:CBS) and Disney (NYSE:DIS) and the rest of the content producers can turn to more direct and arguably more relevant sources for their critical viewership data, cutting out the middleman. That's one less revenue stream for Nielsen -- and a new one for TiVo and the cable guys.
Further Foolishness:
Walt Disney has been a Motley Fool Stock Advisor recommendation since 2003. TiVo was recommended the month before the House of Mouse, but dropped off the scorecard this summer. What happened? Grab a free 30-day trial of our flagship newsletter service and read all about it.
Fool contributor Anders Bylund is a Disney shareholder, but holds no other position in any of the companies discussed here. His cable provider is a subsidiary of Time Warner Cable, in case you care. He wants his DVR to be a fully functional TiVo, too, not this generic box of blah. You can check out Anders' holdings if you like, and Foolish disclosure is always both relevant and in step with the times.
