• by Joe Mandese  @mp_joemandese, July 21, 2009

More than a month after the U.S. TV industry converted to digital from analog broadcast spectrum, about half a million U.S. homes still are not receiving any television signal. The number would be higher, a top Nielsen executive explained in an update to clients on Monday, but many of those households are continuing to receive signals via unintended sources despite the federal government's plan to pull analog plug.

"As of June 28, 60% of completely non-ready homes were still able to view some television by watching a low-power station, a foreign station near the Canadian or Mexican borders or a U.S. broadcast station that is available to them via a 'translator'," Nielsen President of Media Client Services-North America Sara Erichson explained in a notice sent to clients. "As a consequence, television viewing in these homes has not disappeared completely, although viewing choices are extremely limited."

How limited may not be clear for months to come, but the transition is likely to have at least some material impact on the way many Americans watch television, and on the ratings broadcast TV stations use as the basis of charging advertisers.

Erichson also disclosed that stations that transitioned to digital broadcast signals on the federally mandated June 12th deadline, "saw some decline in viewing in the two weeks immediately following the transition compared to the two weeks prior."

She did not disclose how much, but she said that stations that changed their digital signal from UHF to VHF were "most affected," though the decline in viewership has been "largely temporary. "In recent weeks we have seen audiences returning and as more homes sort out problems with antennas and converters this return to prior levels should continue," she explained.

Erichson also disclosed some other encouraging news for the broadcast TV industry, noting that a Nielsen survey of households that have not yet made the transition to digital TV signals found that "virtually all" plan to do so eventually.

Erichson also noted that the final phase of the digital transition wasn't nearly as big a boon for cable and satellite operators as many might have imagined. Instead of rushing to covert to digital satellite TV services, as many households did in the year or so leading up to the transition deadline, Erichson said Nielsen found that most households simply opted to buy a digital converter box.

"Among those TV sets that became digitally ready in the few months just prior to June 12th, 77% were connected to a digital converter box, 19% to cable and 4% to DBS," she said, adding, "This contrasts greatly to trends seen in the very early months, when the majority of the transitioning homes acquired cable or DBS in order to receive over-the-air television."