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We all hear about shows getting the best ratings and about shows being cancelled because of low ratings. But what does this really mean and why does it determine whether a show lives or dies?

To understand this, we have to understand what ratings actually are. TV ratings are compiled by a company called Nielsen Media Research. They collect information on TV watching habits using a statistical method called random sampling. They contact households who are selected randomly, as the name implies and if the family is interested they survey them regularly to ask them what they watch and when. A more effective method employed by the company is to put a chip into their TVs which automatically tracks what they watch. This is more comprehensive, since most people won't remember exactly what they watched, and more important whether or not they stuck around for commercials. Statistically speaking, this sample should be representative of the entire population.

Nielsen ratings are important to everyone but especially advertisers. Nielsen ratings can be organized by demographics so if a company wants to reach a specific target audience, say the 18-49 year olds, that research can help them decide which show to advertise during. So why is this important to the viewer? Well, advertising largely determines whether a show is sustainable or not. A great show with poor ratings is likely to be on the chopping block. Inversely, that's why so many not-so-great reality TV shows are on the air. If people watch, it will last longer.

When a show has poor ratings, advertisers don't buy ad time during it because they want their commercial to be seen by many people. And if a show isn't filling up enough ad spots, it is usually done away with because from a business standpoint, the show isn't producing as much revenue as it takes to produce.

Now I'm sure you want to run and go see how your favorite show is doing in the ratings. This can be a bit confusing because the ratings are divided up into two different measures: rating points and share. The average rating probably looks something like this: 7.7/12. This indicates that about 7.7 percent of households were tuned into that show on average out of a total of 12 percent of households watching TV. The figures are usually accompanied by a share percent. This number represents the percentage of a TV viewing audience tuned in to a specific show.

Simply put, ratings refers to the percent of all households watching a program. A share represents the percentage of all households who watched a program from households actually watching TV. This is why the share is always bigger. Now when you hear that your favorite show's rating, you'll understand what it means.

Learn more about this author, Ana Montano.
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