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Summary:

TV ownership has fallen for the first time in 20 years, according to Nielsen. But is that decline due to poorer, rural consumers who couldn’t afford to keep up with the digital transition? Or due to young, hip urbanites who are watching video on different screens?

no tv

Here’s more fodder for the ongoing cord cutter debate: Media research firm Nielsen released new data Tuesday, showing that TV ownership in the U.S. has fallen for the first time in nearly twenty years. Its 2012 Advance/Preliminary TV Household Universe Estimate shows the number of TV-owning households at 114.7 million, versus 115.9 million the year before. That also means that the percentage of U.S. households with a TV has fallen from a staggering 98.9 percent down to “merely” 96.7 percent over the last year.

Nielsen seemingly attributes the decline to very distinct but seemingly opposite consumer groups: On the one hand there are poorer rural folks who have been hit hard by the economy and those that were unable to afford to keep up with the digital transition; and on the other, there’s the young hip urban set that are not paying for cable TV but choosing to view video across different screens.

If it’s the former that’s primarily driving the decline, TV ownership will likely bounce back once the economy improves, as it did in the early 90s, after the last drop. But if it’s the latter, the TV industry has the unenviable task of trying to reach a consumer for whom live TV is not so important, and for whom any device has the possibility of being a TV screen. Frankly, we believe that the children are our future, and that changing consumer behavior will eventually end up dictating new rules for how video is packaged and consumed. As we wrote just a few weeks ago: Cable’s real challenge is not cord cutters, but “cord nevers.”

Pay TV programmers and distributors have been working hard to adapt to this new reality, increasing the amount of content that is available online and on mobile and other connected devices through their TV Everywhere initiatives. Comcast, Time Warner Cable, Cablevision, Dish Network and others have rolled out mobile apps for viewing on the go, as have networks like HBO and ESPN. And Comcast and Time Warner Cable have announced partnerships to build applications directly on new connected TVs.

But the biggest problem with all these initiatives might be a matter of cost: Traditional pay TV providers are competing with low-cost options from companies like Netflix and Hulu Plus, which make their subscription offerings available on multiple devices for as little as $7.99 a month.

In addition to making the content available online, there’s also the problem of measuring it. For Nielsen’s part, the media research company has been trying to adapt to the change in consumer behavior, and is working on deploying a measurement scheme that would take into account TV viewership across multiple screens. But the process is taking longer than expected — the project was originally supposed to be fully installed and ready by the end of 2010 — and some have complained that it doesn’t do enough to fully track viewership.

Photo courtesy of (CC BY 2.0) Flickr user Mykl Roventine.

  1. I have not used cable/satellite for nearly 3 years at this point due to all of the content available online (hulu, amazon, netflix, etc.). We have only 1 tv in the house with a dedicated laptop attached to it (and 3 wireless devices, iPhones and iPad for the kids and us). This revolution will grow…

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