While the sports TV industry has faced some big challenges in recent months and years -- network subscriber losses attributable to cord cutting (and/or never adopting the cord), unprecedented consumption of cable news, a rocky advertising market due to the pandemic -- there is a gamechanger on the horizon in the form of out of home viewership being counted in Nielsen's TV ratings.

Significance

"It’s a significant day in our little TV biz. Today for the first time TV viewing outside the home will be fully integrated into Nielsen’s national TV ratings," Fox Sports executive vice president and head of strategy Michael Mulvihill tweeted in a thread. "This is a big deal for sports. Basically from the day I started at Fox the two things that were often talked about as potential game-changers for sports TV were legal gambling and out-of-home ratings. Now they’re both here. Sports already dominates any ranking of TV’s most-watched shows. With the inclusion of out-of-home, how much more will sports control the high end of the TV marketplace?"

"How will news and business networks, already soaring during the pandemic, grow with OOH? What time periods will suddenly become more attractive for sports events?" Mulvihill asked. "Which sports will benefit most? A lot of interesting questions will be answered this year. We know from preliminary data that the OOH sports audience is younger, more female and more diverse than the in-home audience. Will that change how sports are valued? We’re already seeing huge impact to local MLB viewing among young people. Credit is due to Nielsen for seeing this through after years of development and very vigorous debate among their clients. Their job, and it’s a hard one, is to provide the most complete measurement possible and let the marketplace negotiate its value, and they’ve done it."

Apples to Oranges?

You really can't overstate how big a deal this is. Outkick has a couple more details. Two network sources say that out of home viewership will be incorporated into the numbers that Nielsen releases the day after events. Thus, while the household rating number will remain constant, viewership is going to be an inexact comparison to previous years' numbers. Get ready for a lot of distinctions being thrown around in the always-fun Twitter TV ratings debates.

How It'll Work

One source says that Nielsen will measure out of home viewership via a beeper-like device carried by people in the company's measurement sample that captures and recognizes the audio of what people watch away from their houses. This could be at a friend's, at a hotel, at a gym, at a bar, at a restaurant and on and on. Hundreds of places. Where this will be interesting to observe is that it's an extra thing that people need to remember to carry with them out of their houses, along with wallet, phone, and keys. While Nielsen household samples have to opt in to their in-home measurement tools, remembering to bring something with them carries an extra step.

There's also going to be interesting scenarios at bars and restaurants that air sports but play music during commercials. In this scenario, one source expects that if there's, say, a 200-minute game and the sound of the game is on for 160 minutes, this viewer would be counted for 160 minutes in the average minute audience but not the other 40. Any time you watch something with headphones out of the house (as in at a gym; streaming numbers are measured separately from TV viewership), it thus won't get counted.

Bottom Line

To be sure, sports networks have always sold to advertisers on an assumption that their programming is watched in large numbers out of home. Where this will change is that there will be a specific, standardized number generated by a regarded third party in Nielsen the next day as opposed to in weeks when no one really cares anymore.

It is highly likely that sports will benefit, and the daytime talk shows on ESPN and FS1 could see a bump as well given that they are on in bars and restaurants throughout the country -- but they'd need to have the sound on.

It'll be interesting to see how this works in practice this Fall and figure out whether and to what extent sports rightsholders capitalize on the higher audience numbers with advertisers.

Disclosure: Outkick founder Clay Travis is an on-air personality at FS1.

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