How many people are viewing a particular show on Netflix? We know shows like House of Cards and Orange Is the New Black are massive hits, but the OTT provider offers no information on the actual viewership of each show, or how it measures up to hit shows on linear TV.

According to a report in The Wall Street Journal, that's about to change. The Nielsen Co. , the company that tracks TV viewership in the US and provides the ratings numbers upon which billions of dollars' worth of advertising spend are based, is now offering viewership data on Netflix Inc. (Nasdaq: NFLX) shows.

Nielsen has been analyzing viewership of individual companies on SVoD services, but not offering comparable data on competing shows. This new service will give studios a more holistic understanding of a show's performance.

The new service tracks viewership across 12,000 titles in the Netflix library, including those produced by Netflix itself. And next year, similar data will be available for Hulu and Amazon Prime Video as well. Viewership data will be segmented in similar ways to that for TV ratings (i.e., number of viewers, age, gender and frequency of viewing etc.) to enable comparisons with shows on linear TV.

The ratings company said it had already signed on eight networks and production studios, including A+E Networks, Disney-ABC Television Group, Lions Gate, NBCUniversal and Warner Bros. The data is attractive to them because it helps them better understand user behavior across platforms/distribution outlets.

Netflix has refused to share this data with content providers in the past, arguing that it doesn't sell advertising so the data is unnecessary; and that viewing on on-demand platforms is difficult to track because it's unscheduled, unpredictable and spread across long periods.

It has also dismissed Nielsen's numbers, saying the data "is not accurate, not even close, and does not reflect the viewing of these shows on Netflix," in a strongly worded statement.

But studios and networks, trying to evaluate the best distribution channels for their content, need to be able to compare viewership across platforms to determine the best mix to maximize their revenue. This service allows them to compare viewership of their show on Netflix to viewership of a highly rated show on live TV, for example. Then they can calculate the advertising revenue the same number of viewers could have got them on live TV, compare it to the licensing fee they are getting from Netflix and decide which is better. Today, they are not able to do that, because they have no idea how many people are watching their show on Netflix.

This is particularly important as content owners are increasingly exploring a third strategy -- going direct to the consumer with their own OTT service. In recent months we've seen announcements from CBS, Disney/ESPN and Viacom -- all of whom are launching OTT services, in the US and abroad. In fact, Disney will be pulling the plug on its Netflix partnership next year to make way for its own service. (See Disney Joins OTT Bandwagon and CBS Streaming Service to Expand Globally.)

Viewership data is critical to better understand how they need to balance each of these strategies so they can generate the most revenue.

Nielsen has had to develop a new technology to track Netflix viewership because Netflix strips out "watermarks" added to studio content that are used to measure TV viewing. It now uses its existing panel of households along with its new proprietary technology to estimate viewership. The technology has its limitations though -- it can't track mobile viewing, which is an increasingly important channel for SVoD consumption, especially in key youth demographics.

Previous attempts to measure SVoD viewership have not been successful, and Netflix has already attacked Nielsen's data. But the existence of this service, accurate or not, gives the studios something to negotiate with.

If Netflix claims -- as it has -- that Nielsen data is not accurate, then studios will demand information about the internal data set that Netflix is using to compare, and discredit, Nielsen's numbers. Whether Nielsen's SVoD estimates become the currency that its TV ratings have is unclear today, but it does seem that sooner or later, Netflix will have to start disclosing its viewership numbers, and very probably via an objective, credible third party.

— Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation