Practically everyone has heard the terms 'TV ratings' or 'Nielsen ratings', but very few people, even in the entertainment industry really understand how these ratings work.
Many people think of Nielsen as a public service, but this is far from the truth. Nielsen provides data only to those who pay for it. Nielsen's clients are, for the most part, television networks and the companies who advertise on those networks.
Nielsen has been under fire recently, being blamed for the cancellation of some television shows that have very faithful, if not huge audiences. Most notable are is the recently canceled CBS show Jericho. This show was canceled after its first season, but a well-organized effort, which saw tens of thousands of pounds of peanuts sent to the network execs at CBS resulted in the show being picked up for a second season, only to be canceled yet again due to Nielsen numbers which would look great to the vast majority of networks, but which CBS felt simply weren't good enough.
When people hear that, for instance, American Idol had 35 million viewers last night, they don't realize that those numbers come from a tiny sampling of homes. Nielsen gets its numbers from two sources. The first is a little box installed in 5,000 homes across the U.S. Those boxes, when used properly, record what shows are being watched on all televisions in a home and what age range, or 'demographic' the person watching falls into. The second source is thousands more people scattered throughout the U.S. who are asked to fill out a diary of what they watch on television.
In the case of numbers reported from a day or two before, these numbers are extrapolated exclusively from the 5,000 homes with the 'audimeter', which is what Nielsen calls its set-top box. The diaries are only submitted once a week, so those numbers don't come in until later.
Nielsen is making an assumption using a sampling statistic based on 5,000 homes what the approximately 113 million U.S. television-viewing homes are watching. It uses this data to check on every single television show on broadcast television and then breaks viewership for each of these shows by age group.
Nielsen numbers are usually expressed in two ways, by points and share. It looks like this: 9.5/15. Points, the first number expressed, refers to the assumption of how the percentage of total homes are viewing the show at the given moment when the rating is taken. for instance, the 9.5 in the sample given here would mean that from Nielsen's 5,000 home sample, they are assuming that 9.5 percent of the total homes in America, or little under 11 million homes. The second number represents the share of total viewers, so in this case it means that 15 percent of the people watching television at that moment were watching this show. 85 percent were watching something else.
Unfortunately, when an advertiser looks at Nielsen numbers, they have to make assumptions. For instance, when they look at the demographic of 18-35 year olds, they can't tell how many are college students or high-school dropouts. They can't tell how many are lawyers and how many are dishwashers. This is a very serious flaw in the system that keeps Nielsen ratings form being overly valuable.
Many Americans, currently led by the aforementioned fans of the show Jericho, are campaigning to stop the use of Nielsen as a means of deciding whether or not a show should be canceled. The problem is that everyone is complaining about the problem, but no one is offering a solution. However, Jericho's faithful have already proven one time that Nielsen does not always show the value of an audience, and it looks like they're about to do it again.