• by Joe Mandese  @mp_joemandese, April 29, 2010

In a move that is a bit ironic and very symbolic for the television industry, Nielsen Wednesday said it has effectively turned off the TV channel. As part of the release of an annual report on America's television audiences, Nielsen said it had dropped one of its most popular features - data showing how many channels the average TV household receives - because in a digital, time-shifted multichannel universe, there no longer is a "consistent" meaning for the term "channel."

"In an analog world, one channel generally represented a single viewing source," Nielsen explained in the release of its annual Television Audience Report. "With the growth and evolution of digital television technology this is no longer the case."

The move is ironic, because Nielsen originally got into the TV business in the 1950s by measuring which channels TV households were tuning to. It is symbolic, because Nielsen, and others in the media industry, are pushing to redefine television as something else: one of many platforms in a rapidly expanding "video" marketplace chockfull of potential new clients and reports to sell.

The move comes as Nielsen has taken a number of steps to redefine the underlying meaning of television, as well as the methods it uses to define it. Over the past couple of months, it has moved aggressively to integrate television audience measurement into a broader "screens" universe in which other video screen players - online, mobile and even out-of-home - all are vying for a piece of the $80 billion U.S. TV advertising pie. Earlier this year, Nielsen said it was integrating online viewing of television content into its entire television measurement sample. A few weeks ago, it introduced a "Third Screen Report," that effectively compares the audience delivery to a disparate array of place-based and digital out-of-home video networks - ranging from movie theater screens to elevators - to television's.

Nielsen also has designs for integrating online and mobile video into common standards that could be used by advertisers and agencies to plan and buy all sources of video the way they historically have with television's so-called GRP, or gross rating point.

Nielsen, meanwhile, has been redefining the meaning of traditional television rating points. Several weeks ago, it announced that it would begin including "duplicate" viewing of television programming - the kind that can happen when viewers watch the same show - often including the same ads - again via time-shifted sources such as DVRs, VCRs and video-on-demand. Nielsen executives have said that the affect would be negligible in terms of diluting the value of TV rating points for advertisers and agencies, but the move fundamentally changes what a rating point means to the ad industry.

Some of these shifts are methodological, as Nielsen changes the way it measures the medium, which is growing increasingly complex as it spreads across an array of platforms and distribution sources. Some of them are business decisions, such as Nielsen's decision this year to do away with so-called "live" only audience ratings in its local TV audience measurements, and to only report ratings that include time-shifted viewing in them. That move rankled ad executives, because Nielsen currently has no means for telling them if and when those viewers are skipping their TV commercials when they watch them in time-shifted modes. But Nielsen said it has to do away with the "live" local TV ratings, because it could only report a few "data streams" and there wasn't enough demand for the "live" ones.

As for the demise of the TV channel, a Nielsen spokesman said it was actually a long-time coming, because most people know longer watch TV that way, even though the medium still has the connotation of "channel surfing." The reality is that many TV viewers now navigate their TV program and network options via sophisticated menu screens, or by selecting pre-recorded content on their DVR's hard drive, or a cable or satellite company's head-end. He said Nielsen also effectively stopped measuring "channels" and began measuring "programs" several years ago, when it introduced its so-called A/P (active/passive) meters.

"Since the introduction of A/P meters, we no longer measure channels," he said. "We measure individual programs. With so many different channels and tiers of channels available, it is no longer possible to put together a meaningful estimate of what the average household gets."

But some Nielsen clients say the demise of the TV channel reception and tuning data is a significant loss for the industry, because those reports provided an important snapshot of how Americans are, and have been, watching television.

In fact, one of the reasons why the feature in its annual Television Audience Report was so popular, is because it allowed people to look at how the expansion of a multichannel TV universe is impacting the way the average household chooses what to watch.

In 2008, the last year for which Nielsen reported the data, the average U.S. household had 130.1 TV channels available to it, but on average, "tuned" only 17.8 of them, according to Nielsen's definition of channel tuning. That means that the average TV households was only watching about 14% of the channels they had available to them. The percentage of channels the average TV household tunes to had been declining over the years that Nielsen has been reporting that data.

But effective with the 2009 data included in the just-released report, the average TV household now watches no channels, according to Nielsen.