Navic Networks is aiming to become one of the first television ratings systems that tracks TV viewing patterns through cable customers’ set-top boxes.
If successful, the venture-backed audience measurement upstart will take a slice of the ratings pie that has so far been dominated by Nielsen Media Research and its people meter reporting devices.
Last month, Navic joined Scientific-Atlanta’s CreativEdge program that provides support for software developers designing applications to run on S-A’s line of Explorer set-tops. S-A is expected to certify Navic’s ratings software as Explorer-compatible later this year.
Like Nielsen, Navic will pair demographic overlays from census data and various databases with the raw data it collects from audiences’ homes. But unlike Nielsen, which relies on hardware that was developed before the advent of set-top boxes and cable network architecture that facilitates two-way data exchanges between audiences and remote servers, Navic’s software sends its viewership data directly to a data-storage facility. By doing so, Navic obviates the need for viewers to make an effort to actively participate in surveys.
Meck Stockton, a business development manager in Scientific-Atlanta’s CreativEdge group, said that Navic is the second set-top-centered ratings company that has recently become a member of the CreativEdge program. Mediance, which was formerly known as Millennium, is also working to gain S-A certification for a similar technology.
“We’re seeing more [audience measurement tools] coming around now,” Mr. Stockton said. “There is more interest in them from the cable operators … If they can get more data on what programs their subscribers prefer, the cable operators can customize their offerings to the subscriber. What Navic and Mediance are doing is providing more data than what is available now at a lower cost.”
Navic Vice President of Marketing Terri Swartz cited Navic’s ability to process data on audience’s viewing activities every five seconds and relay the information directly to a data warehouse as one of its primary selling points. She also pointed to the fungibility of Scientific-Atlanta’s set-top hardware on which Navic runs as an asset that enables multiple system operators to remain nimble enough to upgrade to newer versions of the application as they become available.
“There have been over time a number of companies trying to compete with Nielsen,” Ms. Swartz said. “In most cases, those efforts have failed because of the sheer cost of data collection. Putting proprietary data in the field is very expensive. It’s significantly less expensive to collect from a set-top box being installed for other reasons than relying on an expensive meter installed only for that purpose.”
Anticipating that many of its cable programming and MSO clients would prefer to draw their own conclusions, Navic provides its customers with the option of receiving feeds of raw audience data, which clients then compare with other collected data by feeding it into a vast customer relationship management (CRM) database. On the other hand, Navic also offers custom reports that place its collected data in the context of broader demographic trends.
Navic’s customers also can select a viewer identification technology that pinpoints which individual members of a household are watching a program. To gather such person-specific data, residents of the same home are each assigned a pin number that is entered before viewing the television.
Ms. Swartz said that although she expects it will take several years for the company to roll out its software in television markets across the U.S., the system will eventually reach small to -medium-size locales that she believes Nielsen has struggled to measure because of the high cost of deploying its meter devices. However, she declined to specify either what price Navic’s customers pay for its software or the cost Navic must incur to place its measurement instrument in set-tops and process the information it gathers. She noted only that the fees cable operators will be expected to pay the company will vary according to how much the software is used.
Since its inception in 1998, Navic has raised approximately $43 million in venture capital. The company received its third and most recent round of financing, in which it was awarded $20 million, in January 2000. The bulk of that investment was made by Pilot House, a fund that takes equity positions in cable and broadband ventures. Aside from its audience measurement service, Navic develops tools designed to improve set-top-based Internet connections.
Nielsen officials declined to comment on Navic or Mediance’s technologies, but pointed out that Nielsen has forged an alliance with Gemstar-TV Guide. Under that arrangement, the companies will monitor viewership patterns by recording audience traffic moving through Gemstar’s electronic programming guides.