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Data can be dangerous without context

Bloomberg recently ran a story with a headline typical of the hyperventilation surrounding cord-cutting and streaming – Pay-TV Companies Are in Crisis Mode. This post has little comment on the veracity of the claims in the story, but is more a comment on how its data are presented. 

In the Bloomberg article, a common trick is used to influence opinions. Data on quarterly changes in pay TV subscribers are presented in a way that makes the changes appear large. The chart is unanchored, without context – there is no way for the reader to tell if these are large or small changes, only that there are columns showing what appear to be big declines for pay TV homes. Losing 500,000 homes is a huge deal, right?

Courtesy Bloomberg

Now, let’s take a look at these numbers on a chart that has context. I translated the counts in the Bloomberg chart into proportions of Pay TV households, making calculations using the data in the Bloomberg chart and Nielsen’s published counts of Pay TV households for each quarter. Having been placed into context, you can now see in my chart below that the changes per quarter are barely discernible yellow increments – changes of one half of one percent or less each quarter in total pay TV homes. Those 500,000 homes look a lot less daunting when put into the context of the 100,000,000 total pay TV homes. The optics are certainly different from what was shown in the article – and in fact may have raised a question about why have the article at all.

I’m not going to argue here the pros and cons of “pay TV is in crisis,” but I will argue that improper presentation of data is something anyone reading such articles should keep in mind. And these incidents are not just limited to Bloomberg or the press; very often data at conferences or in one-on-one sales pitches are presented in a way to show a particular story.

Press articles, conferences, and sales pitches are one thing; the biggest threat of all is if your internal staff or vendors show data out of context when you’re considering a tactical or strategic business decision. Attempts to force a particular interpretation can cost your company money – or you a job.

David Tice is the principal of TiceVision LLC, a media research consultancy.
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