Over the last year Netflix stock has excelled both literally and figuratively. More and more North Americans are using the online streaming service to watch TV shows, movies and documentaries. The capability to “binge” on a show, where you watch many episodes in one viewing, is more entertaining than having to wait week to week on network television. We know this because Netflix has detailed knowledge of its audience's viewing habits. The direct access to a consumer's behaviour has given Netflix the upper edge over traditional media outlets. They are able to shape their programming using massive amounts of data. It is dream that has been a chased for a long time in the world of media-providers, going all the way back to the age of radio.

The years after the First World War were exciting ones. The fog of war had lifted and the Western world was exposed to new technological advancements that had been incubating before and during the war years. One of the most important was radio broadcasting. As Erik Barnouw writes in The Sponsor: Notes on a Modern Potentate, radio “suddenly symbolized a coming age of enlightenment. It was seen as leading to the fulfilment of democracy ... It would link rich and poor, young and old. It would end the isolation of rural life. It would unite the nation.” During the 1920s, broadcasters and radio sets exploded across the United States. Millions of Americans (and Canadians) soon had voices and music transmitted into their homes from thousands of kilometres away. In 1926, the National Broadcasting Company (now better known as the television network, NBC) was formed by the Radio Corporation of America, General Electric and Westinghouse. Today we don't take much note of the important first part of NBC's name, but at the time a “national network” was new, innovative, and perfectly in line with the stronger nationalism of the 20s and 30s. A national radio network would have frightening potency to reach mass society within a few short years. It was a boon to Hitler and Mussolini's fascism in Germany and Italy as much as it was to Roosevelt and Churchill's American and British democracies.

An important difference from the last generation of media, such as newspapers, magazines, etc., was that there was no reliable way of tracking radio audiences. One of the primary profit margins of these publications came from advertisers that required exact readership numbers to gauge the value of their ads. Were they reaching 10,000 readers? Or 100,000? For radio, there was no accurate way of determine how many of the millions of homes with sets were actually listening. Different numbers changed how much radio stations could charge for airing advertisements. Consequently, advertisers were the first to create a method of determining how many people were exposed to radio programs.

Hugh Malcolm Beville's 1986 book, Audience Ratings, provides a detailed history of American ratings for radio and television. In 1930, the Cooperative Analysis of Broadcasting (CAB) was formed. Largely financed by advertisers and under the leadership of Archibald Crossley, it began a comprehensive series of telephone surveys to “radio families” enquiring about their listening habits. It was an expensive endeavour, though, because meaningful analysis required constant telephone polling of shifting audience preferences. Crossley's ratings were also unreliable, as calls were made a day or more after programs aired and depended on homes answering their phones for it to count as a “radio listener.” By the 1940s, a new system pioneered by C.E. Hooper was proving to be more accurate the CAB's Crossley ratings.

Hooper began surveying listeners through the “telephone coincidental,” (first used by George Gallup for his polling) which called homes during programs to gauge if they were listening as it aired. He also better randomized who was surveyed. By providing the percentage of the actively listening audience for each program or station, Hooper could present far more accurate and useful advertising data. Crossley's method of phoning after the programs aired suffered from bad memory recall and an increased chance of remembering “big” shows with stars or from major networks. Still, Hooper's method relied on telephone surveys. By the 1940s, there were far more radio homes than telephones homes and a home with a telephone was also far more likely to have a higher income and live in an urban environment. Hooper's results were more accurate, but still innately biased towards a wealthier, urban audience. The telephone coincidental was also expensive as it required a large number of telephone calls and, ultimately, only provided quantitative data rather than qualitative data. Advertisers wanted to know what affect their advertising had, not just numbers of who had heard it.

The answer to the telephone surveys was spearheaded by a name very familiar to most North Americans today: A.C. Nielsen. Arthur Nielsen was a professional electrical engineer who approached his rating service as a means of observing consumer behaviour. He had already constructed a successful market research company before moving on to radio. Nielsen's facts and interpretive data appealed far more to advertisers than Hooper's nebulous numbers. Beginning in the 1930s, Nielsen began using a mechanical device called an Audimeter which could continuously keep track of a radio set's tuning onto a wax tape. First used in the late 30s, it would take years for Nielsen to perfect the system. Whereas Hooper had almost immediate results for his ratings, Nielsen had to wait as long as eleven weeks for the wax tapes to be returned and decoded. Eventually though, the decoding was quickened and its reach expanded. In 1948, Nielsen's Audimeter could provide data for the Nielsen Radio Index covering roughly 97% of the U.S. radio market. It also operated around the clock and was not limited by homes answering the phone for a survey. By the 1950s and 60s, Nielsen ratings were smoothly adapted to the television market and operated a virtual monopoly for the industry.

The early development of radio ratings highlights the key role of advertisers who wanted accurate data about audience numbers, on the profit margins of radio and TV networks. Consequently, more sophisticated ratings developed alongside larger and larger radio reach. Networks created shows that appealed to broad audiences so as to further increase their ratings, and thus the amount they could charge for advertising. Any study of radio and television programming must understand the influence of the ratings system and its link to advertising and how Nielsen perfected that balance.

Today, the rise of internet television has finally changed the balance of power again. Nielsen ratings have dominated the industry for more than fifty years. But today, new ways of consuming media like Netflix or Hulu or YouTube has begun to alter viewing habits. Equally important though is exactly what the new medium of the internet means for advertising and ratings. Nielsen was so successful because his metres allowed for relatively accurate data. Yet, internet television surpasses its accuracy with new depths of information available through their services. For instance, not only can Netflix track how many people watch a particular series, they can collect data on gender, age, time spent watching Netflix, and so forth. This is unobtrusively collected data for every single Netflix subscriber, not just the sample that Nielsen must draw upon.

The result – so far – is not a plethora of advertising, but rather fortunately, a new way to market successful television series. “House of Cards,” the Emmy-winning series that Netflix financed, was probably marketed because a lot of people who liked the series' lead actor Kevin Spacey also liked director David Fincher (Fight Club, The Social Network) – data that would've been nearly impossible to calculate using Nielsen's methods. Like many other successful digital-era media, Netflix could rely on a niche market and its ability to easily delivery content to them. As investors become aware of Netflix's potential (which its exploding stock price suggests they have already), other networks will soon catch up as will advertisers' greedy for data on consumer behaviour.

The glimpse at modern consumer culture through the advertising and marketing in radio is a fascinating one. Under vastly different circumstances, we can see the characteristics of modern life emerge in the fight for radio ratings. Yet the pinnacle of modernity in which we live comes with some cost. As Tim Wu recently outlined in an article for the New Republic, the rise of Netflix has (perhaps thankfully) weakened mass culture in favour of niche cultures. He writes, “a culture where niche supplants mass hews closer to the original vision of the Americas, of a new continent truly open to whatever diverse and eccentric groups showed up.” In this transformative digital era it remains to be seen whether Wu's vision will come to pass, or as with radio, if advertisers and other capitalist entities will supersede that inclination. The spread of radio and television was greatly enhanced by that same capitalist impulse, as well as seeking better and better ratings data. Whether internet television will follow a similar path remains to be seen.