Video services

Nielsen Scoops Up Gracenote for $560M

Round and round we go. After a sale to Tribune Media Company by Sony in 2014, metadata company Gracenote is now trading owners yet again with a new acquisition by Nielsen. Sony sold Gracenote to Tribune for $170 million nearly three years ago. Tribune is now passing Gracenote along to Nielsen in a deal valued at $560 million.

Gracenote started out as a metadata company focused on music, but it's expanded in recent years with data on television and movie properties as well as sports scores and statistics. It's also grown internationally since 2014, adding business in Europe, India, Latin America and Australia.

The relative importance of Gracenote's data is likewise on the rise. Initially metadata was primarily used in the entertainment industry to fill out static media guides and television program listings, but today the information serves a much more dynamic purpose in surfacing content through recommendations, supporting media search functions and providing reference points for natural language user interfaces. (See The Race Is On to Give Entertainment a Voice.)

Service providers license metadata to incorporate into their own algorithmically-driven software both to improve the entertainment experience for subscribers and to increase revenue from advertising and other targeted promotions.

Advertising and audience targeting is where The Nielsen Co. enters the picture. The media services company says it will integrate Gracenote into its Nielsen Total Audience measurement framework, which is used to measure audiences and provide ratings for multiplatform video, audio and text-based content. Nielsen has been rolling out its total audience measurement services throughout 2016 including a tool that releases daily ratings for online digital media.

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According to Nielsen, Gracenote brings with it "reference information for over 12 million movie and television listings and 200 million music tracks, and drives the interfaces of the major streaming digital media services, as well as the connected technology systems in over 75 million automobiles." Gracenote customers include big names like Comcast Corp. (Nasdaq: CMCSA, CMCSK) and DirecTV Group Inc. (NYSE: DTV), as well as Apple Inc. (Nasdaq: AAPL) and Spotify .

On the competitive front, Gracenote's -- and soon Nielsen's -- biggest metadata rival is TiVo Inc. (Nasdaq: TIVO), which has a substantial metadata portfolio under its legacy Rovi brand, and through the acquisition of Digitalsmiths in 2014. (See What's Next for Rovi & TiVo?.)

Nielsen's acquisition of Gracenote is expected to close in the first quarter or 2017, with the transaction financed through both cash and debt. Nielsen says Gracenote will become part of its Nielsen Watch segment, and that the company will continue to operate out of Emeryville, California.

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

danielcawrey 12/20/2016 | 6:06:17 PM
TV I keep wondering how Nielsen is able to continue to move beyond television for audience tracking. Acquisitions like this make sense - it's just we don't often hear about how they are calculating scores in this age of multiscreen viewership. I'm still thinking its harder to gague metrics when there is no longer a one-to-one ratio on viewership these days. 
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