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Nielsen (NLSN) Renews Agreement With Hearst Television

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Nielsen Holdings Plc (NLSN - Free Report) recently renewed its agreement with Hearst Television for audience measurement. Per the new agreement, Nielsen will provide Hearst with ratings for local and national television and radio stations.

Per the deal, the company’s Watch segment will provide viewership data and analytics, which will aid Hearst in understanding the audience in a better way and accordingly maximize the value of their content across geographies.

The new agreement will benefit Hearst by obtaining electronic ratings across its 26 local markets, national ratings for its syndicated programming and two Baltimore radio stations rating, WIYY-FM and WBAL-AM.

We believe that Nielsen is poised to gain traction with such renewal agreements, which will boost its Watch segment. Notably, Watch business revenues accounted for 53% of total third-quarter revenues, reflecting an increase of 0.8% year over year.

Coming to price performance, shares of Nielsen have declined 35.3% on a year-to-date basis compared with the industry’s decline of 5.5%.

Why is the Renewal Important?

Renewal of the agreement with Hearst is a silver lining for Nielsen amid continuous threats of being dropped by major networks.

CBS is looking for other avenues to measure audience on its platform. Per reports, the current agreement between the two companies is worth $100 million a year. Nielsen’s inability to accurately measure audiences in the multiplatform universe could cost it the deal.

The popularity of the video streaming space makes the task of counting viewers extremely difficult, making Nielsen’s viewership data no longer reliable. Thus, CBS is expected to choose Comscore over Nielsen and has even started investing in its own capabilities.

Reportedly Nielsen might be dropped by Gray Television by the end of the year. Notably, Gray’s vice president of National Sales mentioned dropping Nielsen as “it does not have sufficient confidence in the new methodology.”

Therefore, Nielsen must change its measurement methods to account for changing viewing habits and also bring in innovative measurement techniques to give better comparative data to stay in the hunt.

Nielsen Holdings Plc Price and Consensus

Robust Product Portfolio & Partnerships

Strategic partnerships have been shaping Nielsen’s growth trajectory over the past few years with support from its innovative product portfolio.

Recently, the company launched Advanced Audience Forecasting tool that provides forecast of TV audiences, defined by advanced audience segments to clients.

Further, the company introduced Connected Partner Program, which helps companies to connect their network, discover new connected partners and utilize measurement data provided by Nielsen.

In November, Nielsen strengthened its relationship with MBuy as the latter renewed its agreement for Nielsen’s local and national TV measurement. Moreover, the company was also selected as local TV measurement provider by Sky Link Media.

The company’s robust portfolio and partnerships are expected to boost its top line in the near term.  

Zacks Rank & Stocks to Consider

Currently, Nielsen carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader computer and technology sector include Generac Holdings Inc. (GNRC - Free Report) , SS&C Technologies Holdings, Inc. (SSNC - Free Report) and Symantec Corporation (SYMC - Free Report) . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

Expected long-term earnings growth rate for Generac, SS&C and Symantec is 6.5%, 13.5% and 7.9%, respectively.

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