Can buzz on Twitter predict TV ratings and viewers? A study of US TV shows premiering in fall 2013 By Shiladitya Ray SUBMITTED TO THE SYSTEM DESIGN AND MANAGEMENT PROGRAM IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF Master of Science in Engineering and Management at Massachusetts Institute of Technology May, 2014 [Jue. 20i43 02014 Shiladitya Ray. All rights reserved. The author hereby grants to MIT permission to reproduce and to distribute publicly paper and electronic copies o iis thesis document in whole or in part. Signature redacted Signatu re of A utho r......................... .;A................... ............................... ...................................... Shiladitya Ray System D anagement rogram MIT School of Engineering and N Irpn Sch 01 of Ma gement Certified by................................................................................S ig n a tu re re d a c te d Prof Scott Stern David Sarnoff Professor of Management of Technology Chair of the Technological Innovation, Entrepreneurs and Strategic Management Group MI SlAnagemt Accepted by.......................................................................Signature redacted- TASSAHNUSOES IGSITUTE Director, System Design and Management Fellows Program ~0 Senior Lecturer in Engineering Systems Division OCT 26 016 Massachusetts Institute of Technology - Engineering Systems Division rn C/ LIBRARIES The author hereby grants to MIT permission to age 0 of 93 reproduce and to distribute publicly paper and 4Iectronic copies of this thesis document in whole or in part in any medium now known or hereafter created. This page has been intentionally left blank. Page 1 of 93 Abstract Watching television has always been a social activity. People like to sit down with friends and family to watch it and then discuss it not only with one's friends and family but at work (water cooler conversations). Just as television has moved ahead with advances in technology, so too has our viewing habits changed with technology. The advent of the internet brought in online forums where people could interact with other fans and discuss opinions on TV shows (amongst others). The new wave of social media applications brought in yet another platform for viewers to express their opinions. Twitter, founded in 2006, and one of the poster childs of social media wave, provided a real-time platform for users to express their opinions and follow what other people are discussing or any other trending topic. Television networks have embraced social TV on the assumption that social media makes people less likely to use time-shifting technologies and hence skip advertising. Twitter provides the perfect platform for television audiences to interact with each other in real-time. Through several strategic initiatives, Twitter has established an early lead as a big player in the Social TV space. Television networks also wooed its audience through various actions on Twitter and other social technology platforms. This paper looks at the impact of actions of networks and viewers on Twitter on the ratings and viewership figures for shows which premiered in Fall 2013 on US television networks. One of the key findings was that current episode's ratings and viewership were significantly correlated with previous episode's. Further, ratings were correlated to the number of tweets by the show handle in the week leading upto an episode airing whereas viewership is more correlated with community actions and engagement. Page 2 of 93 Table of Contents Acknowledge ments ......................................................................................................................................7 1 . In tro d u ctio n .........................................................................................................................................8 1.1 Background and M otivation ......................................................................................................... 8 1.2 How this paper is organized ......................................................................................................... 9 2 . T e le v isio n ........................................................................................................................................... 1 0 2.1 Television through the ages ....................................................................................................... 10 2.2 Revenue M odel ..........................................................................................................................11 2.3 Im pact on modern technology ................................................................................................... 11 2 .4 S o cia l TV .....................................................................................................................................1 3 2.5 Social Networks and TV ..............................................................................................................16 2 .5 .1 T w itte r ..................................................................................................................................... 1 6 2.6 Twitter - positioned for TV? ....................................................................................................... 16 2.7 Twitter's Approach ..................................................................................................................... 18 2.8 Twitter and TV Advertising ......................................................................................................... 18 2 .8 .1 Face b o o k ................................................................................................................................ 19 2.8.2 TVtag (form erly GetGlue) ....................................................................................................... 20 2.8.3 Others players ........................................................................................................................20 2.8.4 Social TV comes of age - 2011 ................................................................................................ 20 2.9 Threat to networks .....................................................................................................................21 2.10 W hat have the networks done ................................................................................................... 21 2 .1 0 .1 B B C .....................................................................................................................................2 2 2 .10 .2 B rav o T V .............................................................................................................................2 2 3 . T w itte r T V ...........................................................................................................................................2 2 3.1 Twitter - positioned for TV? .......................................................................................................22 3.2 Twitter's Approach .....................................................................................................................24 3.3 Twitter and TV Advertising .........................................................................................................24 3.4 Twitter's Social TV efforts ...........................................................................................................25 3.4.1 Acquisitions in Social TV space ............................................................................................... 25 3.4.2 Hiring TV executives ...............................................................................................................25 3.4.3 Twitter: TV related products ..................................................................................................26 3.5 Twitter and TV Integration .........................................................................................................28 Page 3 of 93 3.5.1 The m om ent Twitter met TV ............................................................................................. 28 3.5.2 #Trum pRoast .......................................................................................................................... 29 3.6 TV Ratings................................................................................................................................... 29 3.6.1 Significance............................................................................................................................. 29 3.6.2 Dem ographics.........................................................................................................................29 3.6.3 Rating Agencies......................................................................................................................30 3.6.4 Ratings calculation methodology...................................................................................... 30 3.7 Relationship between Twitter and TV ratings....................................................................... 31 3.8 Nielsen Tw itter TV Ratings ...................................................................................................... 33 4. Theory and Hypothesis....................................................................................................................... 34 5. Collecting and Organizing Data ...................................................................................................... 36 5.1 Defining the requirements