December 2, 2005 4:00 AM PST
What creature will succeed the couch potato?
For decades, the Nielsen Media Research audience measurement service has told networks and advertisers roughly how many people are watching, for example, ABC at 9 p.m. on a Wednesday. But as a growing number of people use TiVo or another service to record prime time shows for viewing later in the week or for watching on a laptop during a flight, the Nielsen ratings have gotten increasingly fuzzy.
In late December, Nielsen is finally taking one of several steps aimed at adapting to this new audience. Ratings will be broken out by how shows are watched--live, later in the day or within a seven-day period. Over time, Nielsen will also move to measure viewing that takes place via iPods, cell phones, laptops and other digital devices that are gaining TV privileges. The company also will track audiences for on-demand fare.
The steps are a radical change for Nielsen, reflecting an overall paradigm shift that's shaking up the television world. The audience is taking control. And TV companies are scrambling to catch up.
"Viewers are tearing down the technological walls that once isolated their TV sets," Nielsen CEO Susan Whiting said Thursday at the Digital Entertainment and Media Expo here. "They represent formidable challenges, especially the younger generation, who are often more comfortable with change than their elders."
Indeed, what's increasingly evident in television's rush into the digital age is that the archetypal couch potato may be an endangered species. How companies react to this new kind of viewer, one who's increasingly as active as a video-game player, will recast the foundations of the media business over the next decade.
Executives at digital video recorder company TiVo have had a ringside seat as the change has unfolded, being able to track every click and button push of their customers' remote controls. What they've seen surprises even them. The average TiVo household clicks a button 350 times a day, and more than 70 percent of viewing involves skipping ads, said Chief Executive Officer Tom Rogers.
What that shows is convergence: not the traditional idea that a TV is becoming a computer, or vice versa, but that consumers' use of both is converging on an active engagement with content, he said.
"There has been a sense that the TV viewer is a leaning-back, passive person, and that the PC is a leaning-forward, active experience," Rogers said. "In fact, the TV viewer is increasingly active, not passive, about viewing."
Money flowing, but confusion reigns
Myriad technological means to feed this hunger for activity are now arising, and a few companies are well positioned to benefit substantially from the change in habits.
Despite staunch competition from cable and satellite TV companies that offer their own digital video recording services, TiVo remains at the forefront of the trend.
In the last several weeks alone, the company has announced that it is working with a number of businesses, including Intel, Sony and Apple Computer, that aim to bring recorded programs to portable devices and laptops. TiVo is now sharply focused on using its device's broadband connection to the Net to help viewers find and organize content from sources other than their TV, Rogers said.
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