TV households are disappearing and Nielsen, among others, has several explanations for why that is so. All are perfectly reasonable: the bad economy, new census data, analog to digital transition. Yup, okay, fine. But in addition to explaining its positive reasoning, the ratings behemoth took considerable pains to dismiss one potential answer, tv to internet cord cutting.
In effect, after affirming a number of putative answers, the company then went out of its way to debunk a potential explanation about which no one had asked. And why is Nielsen so defensive about this one? Cord cutting is the term the industry gives to people who have ditched their TVs in favor of online content connectivity. The industry is nervous that the migration of advertising dollars from traditional media to the net might accelerate if there were evidence that consumers are cutting the tv cord.
It is plausible that that might happen, but it would merely confirm a trend many expect is inevitable. Hoping to delay a potential transition by denying even the possibility of its existence simply increases curiousity and further research. Rather than pretend it's not out there, the industry might benefit if it embraced the change and managed it rather than let it happen. Just ask the music industry how that denial strategy worked out. JL
Andrew Gauthier reports in TVSpy:
When Nielsen released their new DMA rankings last week, many were left wondering: where did all the households go? Many markets saw a notable drop in the number of households from the previous year’s estimates, even if their rank remained the same. For instance, New York lost 127,520 households and Kansas City was down 35,080. Chattanooga and San Diego both lost over 10,000 homes.
In a recent conversation with TVSpy, Christine Pierce, chief demographer at Nielsen, explained that the drop is the result of three overlapping factors: 1) a bad economy; 2) the recent digital transition; and 3) the incorporation of data from the 2010 census.
Together, these three things (so-called “cord-cutting” is noticeably absent) caused the biggest decline in TV penetration that Nielsen has seen in at least two decades.
According to Pierce, for the past twenty or so years TV penetration–the percentage of U.S. households with at least one TV receiving a signal–was relatively static at just over 98%. Nielsen’s newest estimates show that penetration is now at 96.7%, a drop of 2.2% from previous figures.
So here’s how it happened…
Bad Economy
“We first started to see a decline in TV penetration around the 2008 recession,” says Pierce. With the country’s economy in a rut and many out of a job, people were less likely to buy a TV set if they didn’t already have one or to buy a new TV that would help transition them from analog to digital.
Digital Transition
“As a result of the digital transition, many people were no longer able to receive content,” Pierce explains. Although most responded to the shift by getting converter boxes or buying new TVs, a small percentage of households did not. As well, it is possible that some homes in rural areas are outside the footprint of new digital signals, when in the past they may have been able to receive analog.
2010 Census Numbers
This could be the most significant factor in the decrease of households. According to Pierce, Nielsen’s latest DMA TV penetration estimates are the first to include data from the 2010 U.S. census. Although Nielsen works with the Census Bureau in coming up with estimates every year, the figures from the 2010 census are the most accurate data that the company has used since, well, the previous census in 2000.
So what about the popular assumption of “cord-cutting”? Nielsen says that it’s just not that big of a deal, especially as a factor in the recent decrease in TV penetration. Plus, the classic case of “cord-cutting”–someone with a TV decides that they’re going to go internet-only–is overshadowed by instances in which a young person, say, decides not to buy a TV because they can’t afford it or opts not to take mom and dad’s old TV because it’s analog.
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