US broadcasters lose out to online viewers

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br Zero TV (33146990) AP This undated image provided by James Weitze shows a truck driver taking a self portrait on the road. Weitze satisfies his video fix with an iPhone. He sleeps most of the time in his truck, and has no apartment. To be sure, he's an extreme case and probably wouldn't fit into Nielsen's definition of a household in the first place. But he's watching Netflix enough to keep up on shows like Weeds, 30 Rock, Arrested Development, Breaking Bad, It's Always Sunny in Philadelphia and Sons of Anarchy. (AP Photo/James Weitze)

Ryan Nakashima Los Angeles

Some people have had it with television. They have had enough of the 100-plus channel universe. They do not like timing their lives around network show schedules. They are tired of $100 (R900) monthly bills.

A growing number have stopped paying for cable and satellite television service, and do not even use an antenna to get free signals over the air.

These people are watching shows and movies on the internet, sometimes via cellphone connections. Last month, Nielsen started labelling people in this group “Zero TV” households, because they fall outside the traditional definition of a television home. There are 5 million such US residences, up from 2 million in 2007.

Winning back the Zero TV crowd will be one of the many issues broadcasters discuss at their national meeting, called the NAB Show, taking place this week in Las Vegas.

While show creators and networks make money from this group’s viewing habits through deals with online video providers and from advertising on their own websites and apps, broadcasters only get paid when they relay such programming in traditional ways. Unless broadcasters can adapt to modern platforms, their revenue from Zero TV viewers will be zero.

“Getting broadcast programming on all the gizmos and gadgets – like tablets, the backseats of cars, and laptops – is hugely important,” said Dennis Wharton, a spokesman for the National Association of Broadcasters (NAB).

Although Wharton said more than 130 television stations in the US were broadcasting live signals to mobile devices, few have the tools to receive them. Most cellphones require an add-on device known as a dongle, but the gadgets are just starting to be sold.

Among this elusive group of consumers is Jeremy Carsen Young, a graphic designer who is done with traditional television. Young has a working antenna sitting unplugged on his back porch in Roanoke, Virginia, and he refuses to put it on the roof.

“I don’t think we’d use it enough to justify having a big eyesore on the house,” the 30-year-old said.

Online video subscriptions from Netflix and Amazon.com – which cost less than $15 a month combined – have given Young and his partner plenty to watch.

For the first time, television ratings giant Nielsen took a close look at this category of viewer in its quarterly video report released last month. It plans to measure their viewing of new television shows this year, with an eye toward incorporating the results in the formula used to calculate ad rates.

“Our commitment is to being able to measure the content wherever it is,” said Dounia Turrill, Nielsen’s senior vice-president of insights.

The Zero TV segment is increasingly important, because the number of people signing up for traditional television service has slowed to a standstill in the US.

Last year, the cable, satellite and telecoms providers added just 46 000 video customers collectively, according to research firm SNL Kagan.

That is tiny when compared to the 974 000 new households created last year. While it is still 100.4 million homes, or 84.7 percent of all households, it is down from the peak of 87.3 percent in early 2010.

Nielsen’s study suggests this new group may have left traditional television for good. While three-quarters actually have a physical television set, only 18 percent are interested in hooking it up through a traditional pay-TV subscription.

Zero TVers tend to be younger, single and without children. Turrill said part of the new monitoring regime was meant to help determine whether they would change their behaviour over time. “As these homes change life stage, what will happen to them?”

The television industry has a host of buzz words to describe these non-traditionalist viewers. There are “cord cutters”, who stop paying for television completely, and make do with online video and sometimes an antenna and there are “cord shavers”, who reduce the number of channels they subscribe to. – Sapa-AP


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