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Cable Technology Feature Article

February 18, 2014

TV Household Definitions are Starting to Matter

By Gary Kim, Contributing Editor

In the ad-supported television business, viewers and ratings matter, as they drive advertising potential for any show or channel. So how one defines a “TV household” matters, in a material way, as do all fundamental definitions within a market.

The number one choices to use for “households,” “homes with TVs,” and “households using TV” matter, as those figures of merit are the denominators when attempting to compute percentages of households that are customers for a video service, for example.

In other words, the larger the number of households, or households with TVs, the smaller the percentage of any numerator reflecting cable TV, telco TV or satellite TV subscribers, for example.

Judgment calls always have to be made.  Not all households are occupied, not all are occupied all year. Some are rentals and vacant. Some homes are only used “on vacations.” Some homes, particularly those used by “snowbirds” who move south in the winter and then back north in the summer, routinely have video service turned on or off for half of every year.

Not all households actually own TVs, and some households that own TVs don’t really use them. Some homes watch TV, but only use broadcast TV. Other homes functionally “watch TV” in the form of YouTube (News - Alert) or Netflix, but might not subscribe to a video service other than Netflix or some other streaming service.

So definitions matter. And at least for the moment, Nielsen has decided not to release statistics it already gathers on homes that have broadband, and watch video entertainment, but do not subscribe to a traditional subscription TV service.

Nielsen is withholding broadband-only household data "for the time being." It is obvious why TV broadcasters, for example, might not want that sort of data made available: it might affect TV ratings.

Also, some might argue, adding such new forms of “TV viewing” will make comparisons with historical data more difficult.

Over time, that sort of viewing is going to grow big enough that changes will have to be made, of course. But it is obvious why various suppliers might want to delay further market fragmentation and market share slippage as long as possible.

So a “technical” matter of how to define a TV household has business implications.

Edited by Cassandra Tucker

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