Nielsen last week took a symbolic step toward helping the biz monetize TV viewing done via the Internet. But reaction to the ratings service's decision to add Internet-connected TV sets to its formal definition of a "TV household" was muted among execs because it addresses only part of the vexing measurement challenges facing traditional TV nets.
Nielsen had been grappling with adjusting the definition in order to count homes that only receive programming via broadband connections as part of the universe of TV homes. The decision unveiled to TV and advertising execs on Thursday had been expected (Daily Variety, Jan. 10).
New definition doesn't encompass homes where viewers only receive TV via tablets and smartphones. The growth of viewing on tablets is seen as a big driver of second-screen multi-tasking activities surrounding TV shows, particularly among younger viewers. Not being able to capture the viewing among auds who are highly engaged with programming is frustrating to bizzers.
There's also the issue of how to count viewing done via VOD and Web streaming platforms where the program's commercial load does not match up with the spots aired during the linear telecast. As such, the industry's goal of achieving an omnibus number that captures how many people watch a particular program over a given time frame (and there's even a healthy debate about the best time parameters) remains far out of reach, for now.
Underscoring the shift in behavior, Nielsen's estimate of the number of U.S. TV households has dropped in recent years, sliding from 115.9 million in 2011 to 114.6 million in 2012. Some of the drop can be attributed to the disruption of the broadcast biz's transition to all-digital signals in 2009, which left behind a small percentage of Americans with older TV sets.
And some can be attributed to cord-cutting and "cord nevers," or the rise in the number of younger viewers who rely on Internet-delivered sources and have never subscribed to cable, satellite or telco service.
Regardless of the reason, the decline in the TV household universe estimate is alarming for industryites, especially amid other reports that many Americans are watching more TV than ever before precisely because there are so many options for viewing.
The number of homes that will be added to the total TV universe under the new definition, to take effect in the 2013-14 season, is less than 1%. In discussions with network execs and Madison Avenue, Nielsen characterized the definition shift for fall 2013 as a first step. The company that provides the ratings that are the currency of ad-supported TV is clearly continuing to feel the pressure to crack the multiplatform-measurement conundrum.
"On the path to capturing all viewing in all homes, this foundational change addresses the lion's share of viewing, in effect including any home with a TV that can receive video via an external source," said Pat McDonough, Nielsen's senior veep of insights and analysis.
(Andrew Wallenstein contributed to this report.)
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