TVs Connected to the Internet to Be Counted by Nielsen

Americans who have spurned cable, but who have a television set hooked up to the Internet, will now be counted as a “television household” by The Nielsen Company, potentially adding to the sample of homes that are rated by the company.

The change, Nielsen said in a statement, was necessary to “more completely reflect media consumption.” It comes nearly two years after Nielsen said it was thinking about redefining the term “TV household” to include those that stream shows. The industry’s collective sense of urgency has increased as new Web services like Aereo have allowed people to watch TV channels, ads and all, without a cable subscription or an antenna.

The new definition “will include those households who are receiving broadband Internet and putting it onto a television set,” sid Pat McDonough, the senior vice president for insights and analysis at Nielsen. Currently a “television set” is the flat-screen kind, but in the future a tablet computer like an iPad could also be considered a TV set.

Six-tenths of one percent of households in the United States meet the description of households that have TV sets hooked up to the Internet but have no other source of TV. Some of these may be “cord-cutters,” people who have chosen to stop paying for cable. Others may be people who have never subscribed to cable. Nielsen says it believes the number will increase in the future, so it’s trying to get ahead of the change.

There isn’t likely to be a sudden change to the Nielsen ratings that govern billions of dollars in advertising decisions, however. Right now most Internet views of TV shows aren’t counted in the TV ratings that this blog and others write about, either because there are no ads attached (see Netflix) or because! the ads aren’t exactly the same as the ones that appeared on the original TV broadcast (see Hulu). The ratings exist for the advertisers, after all.

But new services are popping up that stream TV shows and ads without the need for cable.

Aereo, which is available in New York and is expanding to other cities, is one. NimbleTV, which is in a test phase, is another. Further into the future, Intel is planning to start a cable-like subscription service that would be delivered over the Internet, and a bevy of other companies are interested in doing the same thing. If and when these services steal customers away from cable, advertisers will need to know if their spots are being seen and Nielsen will need to track it.

Alternatively, cable companies and the owners of cable channels are trying to keep customers by streaming shows in a manner known as TV Everywhere. In some cases, these services need to be rated, too.

Ms. McDonough said in a telephone interview Thursday that viewing on Aereo will now be included in the Nielsen ratings sample. Theoretically, a cable-like service from Intel would be included, too.

The changes emanated from a measurement committee comprised of Nielsen executives and two dozen representatives from networks and advertising firms. The committee met in New York on Tuesday and approved the changes. The Hollywood Reporter described a source at one of the big broadcast networks as being “ecstatic at the prospect of expanded measurement tools.”

There is intense anxiety within those networks because, in some cases, their ratings are slipping rather dramatically. The culprits include digital video recorder usage, delayed viewership thanks to the existence of Net! flix and ! other online sources of catch-up TV, and increased competition overall from other channels and the Internet. Counting the small sliver of homes that have Internet-connected TVs, but not cable, won’t make a big difference.

Then again, as Ms. McDonough put it, “It’s up to the networks to decide how best they want to monetize their content.”

If a network like ABC decided to run the same commercials with “Modern Family” on TV and on Hulu and on ABC.com and on its app, Nielsen would count all those views equally. Then again, some commercials on TV are out of date in a matter of hours. Commercials on the Web can be tailored to the minute they’re viewed and to the man or woman viewing them. That’s the clash between old-fashioned TV and the on-demand world â€" one that no measurement tool can solve.

Another problem: tablet computers like the iPad. Some cable companies have created apps that turn tablets into fully functioning TV sets, but viewership on these devices does not count oward Nielsen’s totals. Ms. McDonough said Nielsen is conducting tests of iPad TV measurement and expects to be able to add it to the ratings sometime in the future.