Nielsen is busy trimming down operations in what looks like preparation for a long-awaited IPO. And it's all in vain.

This week, Nielsen sold most of its publishing operations to a private investor group and shut down the rest, a move that highlights how important the company's core competency of audience measurement really is. Unfortunately, it's also a dying business model.

You probably know Nielsen as "the TV ratings people," though the company also tracks data like Web traffic and music sales. It's been a pretty sweet gig for decades as media companies like Walt Disney (NYSE:DIS) and CBS (NYSE:CBS) had nowhere else to go for information on who is watching what, and how much the audience might be worth to advertisers.

Nielsen's only competition used to be Arbitron (NYSE:ARB), a smaller outfit using similar survey methods to collect audience data. In 1993, Arbitron gave up on the TV market entirely, giving Nielsen an American monopoly. This is why Nielsen is a household name today -- decades of absolute monopoly generating heaps of cash.

But times are changing, and fast. With the rise of digital cable boxes, Nielsen's data collection is becoming obsolete. When Google (NASDAQ:GOOG) needed a data source to power the Google TV Ads marketing platform, Big G could have turned to Nielsen. But it didn't. Instead, Google taps into second-by-second ratings collected by TiVo (NASDAQ:TIVO). Every digital set-top box becomes a potential market data collector, and the need for old-school manual survey entries or the newer kinds of Nielsen-provided hardware are no longer necessary.

If you ran ABC, as Disney does, why would you pay Nielsen for market reports that you could just as easily get from TiVo, or even directly from broadcasters like Comcast (NASDAQ:CMCSA) and Time Warner Cable (NYSE:TWC)? That might be a largely academic question today, as Nielsen's brand remains the gold standard for audience measurements, but I don't think it will last. TiVo, Comcast, and others will probably end up dividing Nielsen's $4.8 billion of annual business between them in the end as the incumbent drowns in a flood of simpler, possibly better-informed services that didn't exist a few years ago.

TiVo could become the de facto measurement standard sooner than you think. That's just one more reason to love TiVo -- and stay on the sidelines if Nielsen goes public.

Fool contributor Anders Bylund owns shares in Disney and Google, but he holds no other position in any of the companies discussed here. He worked for Nielsen for two years and loves the people there, but can't bring himself to believe in the business anymore. Sorry, guys. Google is a Motley Fool Rule Breakers pick. Walt Disney is a Motley Fool Stock Advisor recommendation and an Inside Value recommendation. Try any of our Foolish newsletters today, free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.