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Here’s Why Many Markets Have Seen a Significant Drop in Households

When Nielsen released their new DMA rankings last week, many were left wondering:  where did all the households go?

Many markets saw a notable drop in the number of households from the previous year’s estimates, even if their rank remained the same.  For instance, New York lost 127,520 households and Kansas City was down 35,080.  Chattanooga and San Diego both lost over 10,000 homes.

In a recent conversation with TVSpy, Christine Pierce, chief demographer at Nielsen, explained that the drop is the result of three overlapping factors: 1) a bad economy; 2) the recent digital transition; and 3) the incorporation of data from the 2010 census.

Together, these three things (so-called “cord-cutting” is noticeably absent) caused the biggest decline in TV penetration that Nielsen has seen in at least two decades.

According to Pierce, for the past twenty or so years TV penetration–the percentage of U.S. households with at least one TV receiving a signal–was relatively static at just over 98%.  Nielsen’s newest estimates show that penetration is now at 96.7%, a drop of 2.2% from previous figures.

So here’s how it happened…

Bad Economy
“We first started to see a decline in TV penetration around the 2008 recession,” says Pierce.  With the country’s economy in a rut and many out of a job, people were less likely to buy a TV set if they didn’t already have one or to buy a new TV that would help transition them from analog to digital.

Digital Transition
“As a result of the digital transition, many people were no longer able to receive content,” Pierce explains.  Although most responded to the shift by getting converter boxes or buying new TVs, a small percentage of households did not.  As well, it is possible that some homes in rural areas are outside the footprint of new digital signals, when in the past they may have been able to receive analog.

2010 Census Numbers
This could be the most significant factor in the decrease of households.  According to Pierce, Nielsen’s latest DMA TV penetration estimates are the first to include data from the 2010 U.S. census.  Although Nielsen works with the Census Bureau in coming up with estimates every year, the figures from the 2010 census are the most accurate data that the company has used since, well, the previous census in 2000.

So what about the popular assumption of “cord-cutting”?  Nielsen says that it’s just not that big of a deal, especially as a factor in the recent decrease in TV penetration.  Plus, the classic case of “cord-cutting”–someone with a TV decides that they’re going to go internet-only–is overshadowed by instances in which a young person, say, decides not to buy a TV because they can’t afford it or opts not to take mom and dad’s old TV because it’s analog.

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