The Nielsen ratings system is a method of determining how many households have their televisions tuned to a specific program at a specific time. The Nielsen ratings system does not determine whether a television program is of good or bad quality. Instead, the Nielsen ratings system provides data on who watches the program and for how long. These ratings are often used by television advertisers and the overall television production industry to monitor the popularity of various programs.

The Nielsen ratings system determines ratings by monitoring the television viewing habits of roughly 5,000 households in the United States and more households in other countries. These households are selected on the basis of the degree to which they represent all television-viewing households. The Nielsen organization studied the overall population of television-viewing households and determined what characteristics make them different from non-viewing households. Then the Nielsen organization selects households distributed among geographical locations in urban, and rural areas so that the proportions in each area match census data as closely as possible.

The householders that have agreed to participate in the Nielsen ratings system have monitoring equipment installed on their televisions, VCRs, DVD players, satellite dishes, digital video recorders, and cable boxes. Another type of meter, which has a button for each household member and guest, is used to let the Nielsen ratings system know who is watching the television at a particular time. The meters are used to monitor when a television set is turned on and what channel it is tuned to, and this information is then automatically transmitted to the Nielsen organization. The above information is supplemented through the occasional use of diaries in which the household members write down what they watched and when.

The Nielsen ratings system is important because it allows advertisers and content providers to know which shows are popular among various types of people. This information lets them tailor advertisement delivery to certain populations, saving money for the advertisers and increasing revenue for the content providers. If an advertiser pays for air time during a specific program and that program does not have a sufficiently high rating, the advertiser might decide to withdraw its advertisement. In order to attempt to prevent this loss of revenue, the television content provider might move the program to a time slot that might provide more viewers or take it off the air.

In another type of attempt to improve ratings, content providers air highly anticipated programs during the "sweeps" weeks in November, February, May, and July of every year. These weeks are important because it is during these weeks that the Nielsen household members complete the week-long viewing diaries provided to them by the Nielsen organization. These diaries provide detailed information about how many and what types of people watch each television program, so this information is highly prized by both content providers and advertisers.