Nielsen ratings are the audience measurement systems developed by the Nielsen Company, which are used to determine the audience size and composition of television programming in the United States.

Nielsen families who contribute to the research will typically either fill in a diary of what they watch on TV, or have a device attached to their television which monitors minute-by-minute their viewing habits. Once recorded, these figures are used by networks to determine the audiences reaction to a show as well as how much they can charge for advertising based on the number of people watching.

From Nielsen ratings on Wikipedia.

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