Nielsen Ratings are audience measurement systems developed by Nielsen Media Research to determine the audience size and composition of television programming. Nielsen operates in over 100 countries and was founded in 1923.
The system has been updated and modified extensively since it was developed in the early 1940s by Arthur Nielsen. It has since been the primary source of audience measurement information in the television industry around the world. Since television as a business makes money by selling audiences to advertisers, the Nielsen Television Ratings are the single most important element in determining advertising rates, schedules, and program content.
The company is part of the Nielsen Company, formerly known as VNU and owned by a consortium of private equity firms including Blackstone Group, KKR and Carlyle Group. Its US production operations are located in its Brooker Creek Global Technology and Information Center in Oldsmar, Florida. Its UK operations are based in Oxford.
Nielsen Television Ratings are gathered by one of two ways; by extensive use of surveys, where viewers of various demographics are asked to keep a written record (called a diary) of the television programming they watch throughout the day and evening, or by the use of Set Meters, which are small devices connected to every television in selected homes. These devices gather the viewing habits of the home and transmit the information nightly to Nielsen through a "Home Unit" connected to a phone line. Set Meter information allows market researchers to study television viewing habits on a minute to minute basis, seeing the exact moment viewers change channels or turn off their TV. In addition to this technology, the implementation of individual viewer reporting devices (called people meters) allow the company to separate household viewing information into various demographic groups. In 2005, Nielsen began measuring the usage of digital video recordings (TiVo, for example) and initial results indicate that time-shifted viewing will have a significant impact on television ratings. The networks are not yet figuring these new results into their ad rates at the resistance of advertisers.