Big Bang: TV Universe Declines For First Time Ever, Nielsen Cites Digital Transition, Economy, Multiplatform
"Consumers are viewing more video content across all platforms-rather than replacing one medium with another," Nielsen said in an announcement sent to clients around 10 p.m. (EST) Monday night, adding that, "a small subset of younger, urban consumers seem to be going without paid TV subscriptions for the time being."
Nielsen added that "the long-term effects of this are still unclear, as it's 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."
Nielsen cited three factors leading up to its first ever downward revision in the TV household universe, including the shift summer of 2009 shift from analog to digital broadcast spectrum, which displaced a number of TV households that failed to convert from conventional antennas to digital broadcast receivers, and the economic effects of the U.S. economic recession, along with the increased availability of "multiplatform" viewing options as reasons for the decline, and has scheduled a "webinar" for 3 p.m. today to brief clients on the data and the circumstances.
The timing, including the 11th hour notice, and the fact that news of the TV universe decline are coming on the cusp of the 2010-11 upfront TV advertising sales season, are interesting. While news of the decline will likely send shockwaves throughout the TV industry, if there was going to be a positive time to for TV outlets to take a hit it is just before an upfront in which people are predicting demand to soar. The reason is that TV advertising fundamentally is a commodity, which means that a decreasing supply will force prices to rise if demand remains constant or grows. But that is only true of advertisers and agencies feel they cannot shift their budgets into alternative media, and a number of big agencies and advertisers have shifted from a view of "buying television" to "buying video," including online video options.