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Ownership of Television Sets Falls in US: Nielsen

For the first time in 20 years, the number of homes in the United States with television sets has dropped.

Tim Flach | Stone | Getty Images

The Nielsen Company, which takes TV set ownership into account when it produces ratings, will tell television networks and advertisers on Tuesday that 96.7 percent of American households now own sets, down from 98.9 percent previously.

There are two reasons for the decline, according to Nielsen. One is poverty: some low-income households no longer own TV sets, most likely because they cannot afford new digital sets and antennas.

The other is technological wizardry: young people who have grown up with laptops in their hands instead of remote controls are opting not to buy TV sets when they graduate from college or enter the work force, at least not at first. Instead, they are subsisting on a diet of television shows and movies from the Internet.

That second reason is prompting Nielsen to think about a redefinition of the term “television household” to include Internet video viewers.

“We’ve been having conversations with clients,” said Pat McDonough, the senior vice president for insights and analysis at Nielsen. “That would be a big change for this industry, and we’d be doing it in consultation with clients if we do it.”

Nielsen’s household figures suggest that while the TV set is still firmly at the center of the average American’s media life, a small minority of Americans are finding ways to live without it. The “persistently rocky economy” is “the driving factor,” the company says in the report to be released Tuesday.

Similarly, the economy was the reason cited by Nielsen when the percentage of homes with sets declined in 1992. That decline, the company’s report says, “also followed a prolonged recession and was reversed during the economic upswing of the mid-1990s.” If the current decline persists, it will have profound implications for the networks, studios and distributors that are wedded, at least in part, to the current television ecosystem.

Nielsen’s estimates incorporate the results of the 2010 census as well as the behavior of the approximately 50,000 Americans in the national sample that the company relies upon to make ratings projections. “One thing we are seeing in the Nielsen sample are fewer people owning TVs,” Ms. McDonough said. It was first evident in the sample in late 2008, she said, during the worst of the financial crisis and the recession.

Nielsen’s research into these newly TV-less households indicates that they generally have incomes under $20,000. “They are people at the bottom of the economic spectrum for whom, if the TV breaks, if the antenna blows off the roof, they have to think long and hard about what to do,” Ms. McDonough said. Most of these households do not have Internet access either. Many live in rural areas.

The transition to digital broadcasting from analog in 2009 aggravated the hardship for some of these households. Some could not afford to upgrade, Nielsen surmised, though the government tried to provide subsidies in those situations.

And some in rural areas could not receive digital signals as effectively as analog signals for technical reasons. In those cases, “if you’re an affluent household — or most middle-class households — you’re going to get a satellite dish. If you’re a struggling household, likely you’re not going to be able to afford that option,” Ms. McDonough said.

Then there are the tech-savvy Americans who once lived in a household with a television, but no longer do. These are either cord-cutters — a term that refers to people who stop paying for cable television — or people who never signed on for cable. Ms. McDonough suggested that these were younger Americans who were moving into new residences and deciding not to buy a TV for themselves, especially if they “don’t have the financial means to get one immediately.”

Nielsen has not yet assessed what proportion of the decline can be attributed to this behavior. But the decline in the percentage of homes with sets is sure to kick off another round of speculation about cord-cutting.

Sensitive to its clients’ concerns, Nielsen explains the trend this way in the report: “While Nielsen data demonstrates that consumers are viewing more video content across all platforms — rather than replacing one medium with another — a small subset of younger, urban consumers seem to be going without paid TV subscriptions for the time being. The long-term effects of this are still unclear, as it is undetermined if this is also an economic issue that will see these individuals entering the TV marketplace once they have the means, or the beginning of a larger shift to online viewing.”

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