Tivo charge for their data, which the advertisers try to have those viewers removed from their fees, because people watching timeshifted recordings are probably not watching the ads, so being popular on Tivo could very well be a disadvantage to a lot of shows.
TiVO owners are also demographically unlike the nation on average (skew more white, rich, well-educated - the usually tech early adopter profile), so just adding in their numbers will cause the Nielsons to become unrepresentative. Advertisers can directly tell how many TiVO owners watch ads, so the numbers can be taken into account but shouldn't be mixed in with the Nielsons.
Neilson ratings don't take into account viewing habits, such as recording a show and watching it later. This has been complained about since the 80's. TiVo viewing habits, which can be more accurately analyzed, is (IMHO) a more realistic analysis of what shows are being watched and what shows aren't.
Since TiVO is the way in which shows can be recorded and watched later, advertisers can see those numbers, too. And like ads that aren't viewed, this is another way advertisers discount viewers - if someone watches an ad the same day as it airs, they're worth more than someone who waits three days who is worth more than someone who waits seven. Ads have expiration dates and are designed to be seen on the day they air.
I suppose some people do this the hard and unmeasurable way - via good old VCR - but I wouldn't bet there are too many of us around. And whatever the number is, nobody can measure it, so what good is worrying about it?
the advertiser cronies have too much to say,
The advertisers are the only ones whose opinion counts in any of this. Nielsons are for them, not us. And who are the advertisers' "cronies"? If that refers to the advertisers, they are not cronies. They are clients. And clients are the people who get what they want.
If the advertisers decided the Nielsons were inaccurate and refused to accept their data, the networks would fall all over themselves finding another system.
Maybe they should use the Tivo in a way to see how many have started recording a show, and then at the end of the program to see if the numbers are the same. Then who ever advertise during that program gets a percentage of the profits from that night's performance.
The advertisers are where the profits come from - so the advertisers would pay themselves?
Or do you mean the advertisers refuse to pay unless people watch their ads? Yeah, they've figured that out and they're using TiVO numbers to argue that they should be paying networks
less. Networks rue the day TiVO was born because it gives advertisers a cudgel to use on them.
I think where discussions like these go off the rails is the assumption that new forms of directly measuring viewing like TiVO and paid or ad-supported downloads are going to increase the value of TV to advertisers. It's actually doing the opposite.
TV has prospered till now because of advertisers' ignorance. They had no way of knowing just how few people watch their ads. Now they have technological ways of finding out exactly how many people watch their ads, and refusing to pay when they don't. The new technologies are a boon to advertisers because now they can reduce the amount of money they used to pay to networks - it's the networks whose cushy business model is being destroyed.