• by David Goetzl  @dgoetzl, September 8, 2009

As programmers and cable operators experiment with the "TV Everywhere" concept for online video, Nielsen is preparing to measure the Internet viewing and fuse the results with its national TV ratings. The initiative could yield a single "C3" rating for the on-air and online viewing of a particular show by 2011.

Under "TV Everywhere," a cable operator -- or telco TV or satellite provider -- installs an authentication system, where people can access TV episodes online for free, if they can prove they pay a distributor for TV service.

In an ongoing trial by Comcast, episodes of shows are available on the Web just as they are on TV -- with the same commercials slotted in.

Nielsen is moving ahead with a test to track viewing of the commercials in the online feed -- and calculate a "C3" rating. That figure can then be melded with TV viewing to produce an aggregate rating.

Under the program, a single on-air/online "C3" number for commercials within a particular episode of TNT's "The Closer" would be available to an advertiser. (The "C3" ratings stream tracks viewing for a live broadcast plus three days of time-shifted consumption. It is the dominant currency in the national TV market.)

Nielsen informed clients of its "TV Everywhere" plans in a Tuesday memo. The measurement company said the program is part of its A2/M2 initiative, which tracks viewing that takes place anytime and anywhere.

Nielsen is testing the "TV Everywhere" measurement via a pool of 375 homes, part of its national TV panel of 18,000 households. An Internet version of the software meter used for TV measurement is tracking the online consumption. A single home has a meter on its TVs and computers.

Nielsen is looking to roll out the service officially in 2011 and told clients it is "undertaking an extensive" trial program, although "the results of our evaluation show tremendous promise to date." By the end of next year, Nielsen said an Internet meter is anticipated to be in all 18,000 TV-panel homes.

Furthermore, Nielsen said it will work with Comcast and participating networks as "TV Everywhere" is launched. Word of Nielsen's attempt at a single-source "TV Everywhere" rating comes as a group of networks, agencies and advertisers have started to explore launching their own system to produce a combined TV-online rating, a potential Nielsen competitor.

A Nielsen spokesman wrote in an email: "As we've said in the past, we are not responding to rumors about the consortium, which has not yet been announced." He added that when TV Everywhere was announced by cable operators, Nielsen said then it "would include that viewing in our C3 ratings."

That was in line with what companies participating in "TV Everywhere" said in June; they were eager for "a new process" to measure online viewing. "The goal should be to extend the current viewer measurement system to include advertiser ratings for TV content viewed on all platforms."

"TV Everywhere" has roots in cable operators' concerns that if much of the same on-air content continues to appear online, people may opt to simply drop a pricey cable subscription. Cable networks, in turn, are fearful of threats by operators that they may look to pay them less in affiliate fees.

Comcast is branding its version of the authentication system "On Demand Online" and launched a trial in July in 5,000 homes nationwide. It is offering episodes from more than 17 cable programmers, from the Food Network to A&E. Both Time Warner Cable and Verizon with its FiOS service have said they are rolling out similar trials.

A spokesman for Time Warner -- which has backed "TV Everywhere" aggressively, in part to keep affiliate fees flowing for its run of cable networks -- said Nielsen's initiative is a positive. "Ultimately, you want to capture the complete universe of people watching a particular show and watching the advertisements that go with the show," he said.

He added that this could allow networks to further monetize the online streaming of shows -- something they have struggled to do.

The "TV Everywhere" measurement service is one of several Nielsen has in play to gauge the relationship between TV viewing and Internet usage -- be it for online video or other surfing.

Launched last year, a TV/Internet Convergence Panel derives information from 1,000 homes that were once part of the national TV sample and have also agreed to participate in Internet measurement. There is also a TV/Online data fusion service that gathers data from 230,000 Internet homes and separately from the 18,000 homes in the national TV sample, then merges the two to gain insight.