• by Joe Mandese , December 8, 2010

Penetration of Internet-enabled TV sets is poised to jump considerably this holiday seasons, media research giant Nielsen Co. warned in an advisory sent to clients Monday morning. As a result, Nielsen also disclosed that it is quietly changed the way it factors the Internet-ready TVs in its ratings samples, effectively lifting a long-standing moratorium on the devices.

Beginning with the week of Nov. 29th, Nielsen said it has begun including homes with Internet-enabled TVs in its national and local metered ratings samples, a move that could have long-term implications for calculating the way people watch content on their television sets.

"Although we now collect home PC-based Internet use from our national people meter homes, we do not currently broadly measure TV-based Internet use in our television panels," Nielsen noted, adding that had previously classified all Internet-connected TVs as "technically difficult" devices and excluded households that had them form its ratings systems.

"We similarly excluded sets with widgets," Nielsen said, adding, "With the expected growth of Internet-enabled TVs, we believe the continued exclusion of this increasing number of homes would no longer enable us to fully represent consumers' TV use."

Effective with the change, Nielsen said that when Internet-enabled TVs or TV set-top devices are used to consume Internet-only content, without audio, including general Web surfing, email or other applications, that usage would not "generally" contribute to Nielsen's official estimates of "television usage."

"However, because consumption of Internet-delivered video content with audio, such as YouTube viewing, can't be automatically distinguished from traditional television usage, there will be times when this may be credited to All Other Tuning (AOT) and therefore to TV Usage," Nielsen explained.

To help clients understand the impact of these changes, and how they contribute to official ratings estimates, Nielsen said it will periodically distribute a report tracking the number of homes with Internet-enabled TVs, as well as key metrics such as Households Using Television (HUT) and AOT levels related to those homes.

Nielsen did not disclose what it believes the current penetration of Internet-enabled TVs is, or its projections for the impact of the holiday season on it, but Nielsen historically recalibrates its household ratings samples for new technologies for a period around or following the holidays, because they typically are a time when households adopt new consumer electronics and entertainment technologies that could impact Nielsen's samples.

Separately, Nielsen noted that Verizon has added Internet capabilities to most of the set-top devices in households subscribing to its FiOS service in 2010, and that those homes have remained a part of Nielsen's TV ratings samples. Nielsen said it has begun working with other TV service providers to assess their plays for deploying similar Internet access capabilities through their set-top devices.