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CES: Nielsen nears decision on TV household definition

Tablets, smartphones may not be counted yet

If a viewer watches a TV show on a tablet, should that be reflected in its Nielsen rating?

That’s a question at the heart of a complicated decision Nielsen hopes to make by the end of the first quarter regarding a new definition for what constitutes a TV household.

The new definition is almost certain, according to sources, to include for the first time viewing on TV sets that show video via broadband connections, whether from a device like Apple TV or directly into the set itself. In addition, that viewing would not have to come in the form of linear channels, which would open up measurement to on-demand options like episodes posted on a broadcaster’s website.

But what is currently being debated is whether homes that restrict their viewing to smartphones or tablets will also be considered TV households. Those devices may have to wait until their measurement can be integrated into the TV ratings system.

A proposal from Nielsen is currently being reviewed by a special committee comprised of representatives across its client base. Nielsen is said to favor an approach staggered in stages, say sources, the first of which would be ready for the 2013-14 TV season incorporating broadband-connected TV sets — but not include measurement of video consumption on wireless devices.

While the TV industry is in general agreement on the long-term goal — one measurement of all viewing regardless of platform — the dilemma is how best to proceed in the short term.

Either all viewing — regardless of the separate measurements being made on other platforms — gets counted into the TV household total, or only once Nielsen is ready to integrate any one of the separate measurements with the TV data should it be counted into that total.

Nielsen will huddle with the committee before the quarter is over to get input on the proposal before rendering a decision that will give the TV industry time to strategize how best to sell programming at upfronts and for Nielsen itself to make the necessary changes to its reporting software.

Nielsen isn’t leaning in either direction, according to Pat McDonough, senior VP insights, analysis and policy at Nielsen, who indicated there’s no chance the status quo will remain.

“The question we have with our clients is do we do that in stages or do we do that all at once?” she said. “Committee members are in process of discussing with their various companies and we expect to come back after the new year with the direction for the industry that we’re going to take.”

Given criticism the company has long endured over both its current TV measurement and the pace at which new platforms are being tracked, it’s a decision not being taken lightly at Nielsen, where the new policy will likely represent as fundamental a shift, if not more so, as the adoption of people meters or C3 currency.

The current definition of a TV household is a home with both a TV set and video delivered via over-the-air broadcast or a multichannel package supplied by either cable, satellite or telco sevices. Watching on PC, smartphone or tablet isn’t included.

What’s known internally as the “What Nielsen Measures” committee was convened in mid-2012 to reckon with back-to-back declines in the annual number of TV households, which fell from 115.9 million in 2010-11 to 114.7 million the following season — the first such drop in 20 years. An additional 500,000 households disappeared before 2012-13, leaving a total of 114.2 million.

There are various theories as to what accounts for the decline, chief among them that a new generation of viewers are doing without TVs as they embrace digital alternatives.

But while broadening the definition of what constitutes a TV household could shore up that shortfall, advocates for waiting until measurement of viewing on devices can be integrated warn that increasing the number of total homes prematurely runs the risk of diminishing ratings. If the number of screens is increased without a corresponding increase in the measurement of the viewing on those screens, that can inflate the base number against which the number of viewers is calculated — potentially skewing the rating downward.

And yet there are others that are willing to see some destabilization of measurement from year to year in the short term for the greater good of getting a truer reflection of the range of screen across what’s being watched.

At the very least, Nielsen is likely to extend measurement to broadband-connected TV sets. That is good news for companies weighing virtual MSO plays like Intel, Sony and Dish who want to convince programmers that viewing is being measured across their systems. However, in the event they also provide content to devices in addition to TV, some of those eyeballs may end up unaccounted for — at least in the short term.

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