Nielsen Holdings PLC’s finance chief Linda Zukauckas is allocating funds to a new TV ratings platform after the sale of the company’s market-analytics business earlier this year.
The New York-based firm, which tracks consumer media habits in radio, video-streaming and traditional television, plans to increase its capital expenditures to improve the way it measures TV audiences, Ms. Zukauckas said. A large chunk of that money is budgeted for Nielsen One, a new product that will combine ratings from both streaming and live TV when it debuts next year.
Nielsen, a leading media measurement firm, in December unveiled plans for the project, which it hopes will become the U.S. standard for ratings by the fall of 2024, and eventually for the world. Other companies that measure TV viewership include Reston, Va.-based Comscore Inc. and startups such as TVision. (The company isn’t related to a T-Mobile US Inc. unit of the same name.)
Streaming services have surged in popularity during the pandemic, while traditional pay-TV providers have continued to lose subscribers. Current metrics for traditional TV viewing aren’t comparable to those used to measure streaming, rendering a new system necessary, said Surinder Thind, senior vice president of equity research at Jefferies LLC, a financial-services firm.
Some of the money for Nielsen One will come from the company’s recent $2.4 billion divestment of Global Connect—since renamed NielsenIQ—a business that measures retail shopping behavior for packaged-goods companies. The sale, to private-equity firm Advent International Corp. in March, gives Nielsen more flexibility to invest in other areas of its business, the company has said.
Earlier this month, Nielsen reported a 2.5% rise in revenue to $863 million in the first quarter compared with the prior-year period. It posted net income of $573 million, up from a net loss of $18 million a year earlier, due partly to the separation of the market-analytics business.
“Top of mind for me is sustaining the business performance,” said Ms. Zukauckas. She became chief financial officer in February of last year, joining from American Express Co. after serving as deputy finance chief for about two years.
A Nielsen spokeswoman said the company spent about 8.7% of revenue on capital expenditures last year, or roughly $547 million. The percentage won’t change much this year, but Nielsen still allocates more for capex as revenues rise, Ms. Zukauckas said. The company declined to provide a dollar estimate. Nielsen is forecasting revenue growth of 2% to 3% this year.
Ms. Zukauckas said she is curtailing investments in products with less potential for revenue growth and redirecting some of that cash toward Nielsen One. This year, for instance, the company will invest less in a division that measures audiences in rural U.S. markets compared with previous years when it upgraded the service, she said, declining to provide specifics.
Nielsen One is expected to garner wide uptake from advertisers and media companies, which would allow its owner to put more money into dividends and share repurchases, Mr. Thind noted. Nielsen One is the most advanced proposal for measuring ratings across platforms with a single metric, he said.
“The bulk of the time, energy and money should be going toward the development of Nielsen One because this is fundamentally the future of the business,” Mr. Thind said.
On April 22, the company declared a quarterly cash dividend of $0.06 a share. Nielsen last repurchased its own stock in 2018, when it bought back about $70 million. It has $228 million still available for repurchases under an authorization that expires in 2025.
Nielsen is also making moves to increase its cash position. The company on Monday said it is planning a $1 billion debt refinancing, an effort to pay down existing loans and have more cash on hand.
Write to Mark Maurer at [email protected]
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