In 2005, Congress mandated that television stations switch from analog to digital signals in 2009. The purpose of this switch was to increase the efficient use of the spectrum, to expand consumer choice for video programming, and to increase the amount of spectrum available for public safety and other wireless services.  In addition, Congress was able to raise nearly $20 billion by auctioning the analog spectrum that has been used for broadcast television.

The switch to all-digital television broadcasting, which was originally scheduled to occur on February 17, but which could be postponed four months, is arguably the most significant change in television since the introduction of color.  It means that every household will have to get ready for these new transmissions. Since the mandate, broadcast stations have invested billions of dollars to upgrade their facilities and towers to comply.  Networks and cable and satellite operators have built infrastructure to support the enhanced capabilities of the digital world.  And tens of millions of Americans have bought new televisions, signed up for cable or satellite transmission or acquired digital converter boxes.

Nielsen’s role in digital transition has been two-fold:

1) to provide the television industry, policy-makers and local communities with information about how ready television households are for this transition, and

2) to make sure we are ready to measure television broadcasting when it moves to digital transmission.

Education

Nielsen is in a unique position to understand how prepared the country is for digital transition.  We have ongoing relationships with more than 35,000 households (or “Nielsen families”) that form representative samples from which we derive the TV ratings.  Each home in the sample has a Nielsen meter attached to every TV set that collects viewing data 24/7.  That means that we are able to identify every television set in these households and whether or not it is ready for DTV.

Nielsen has developed reports and analyses that help clients understand what is happening, beginning with the basic dimension of how many households are completely unready and at risk to lose access to television.

At this point we estimate that about 6.5 million households are not prepared for the digital transition.  We find that the level of un-readiness falls disproportionately on young, African-American and Hispanic families. For example:

• Overall, 5.7 percent of American families are unprepared.

• 9.9 percent of African American families are unprepared

• 9.7 percent of Hispanic families are unprepared

• 8.8 percent of young families (age 18-34) are unprepared.

Nielsen has been sharing key parts of these reports with government and local leaders so that they can make decisions based on the state of the U.S. readiness.  These activities have included:

• Briefing members of Congress, both one-on-one and in committees.

• Sharing data with ourAfrican American, Asian-Pacific American and Hispanic/Latinoadvisory councils,so that they can use it to educate their clients and communities.

• Conducting extensive media outreach – first monthly and soon bi-monthly – on all issues related preparedness.

Back Office Preparation

To ensure that we are ready for the challenge, Nielsen has been actively preparing for the digital transition for years. Three years ago we began installing new digital meters in households.  This Active/Passive or A/P meter was designed and patented specifically to measure the new digital world.  We have surveyed clients about their plans and shared best practices to help prepare them for changes Nielsen has made, including new encoding methods that enable our meters to identify what is being watched.

Now as the transition date approaches, we are ready.  We’ve recently provided very detailed information to clients explaining how we will handle every aspect of the shift, including:

• We have upgraded our technology in the 800 sites that monitor television programming around the U.S.

• Our Statistical Research department has prepared procedures to ensure that our samples remain representative after the transition and that we have a process in place to remove households that do not switch to digital TV within a certain period of time.

• We have postponed all vacations for our field staff during the period before and after the transition so that they can install meters to new TV equipment that our sample homes buy as the transition approaches.

• Bilingual staff is also being reassigned as needed, since we know that Hispanics are less prepared than non-Hispanics. Nielsen will deploy staff to areas where there is the most potential for visits.

The transition to digital television has been a huge undertaking by the entire television industry and Nielsen has played a critical role in making sure the shift is as smooth as possible.  We will be ready for the transition regardless of what date Congress sets for the switch.

If the transition occurred today, those 9.6 million homes would unable to receive any television programming, while another 12.6 million households would have at least one television set that would no longer work.

In all, one in five U.S. households are either partially or completely unready for the government-mandated switch to digital programming that will occur on February 17, 2009.

Demographic Trends
Households headed by less educated, lower income, and blue collar workers are least prepared for the digital transition, according to Nielsen. Those whose total annual household income is less than $25,000 per year are five times more likely to be unprepared than households earning more than $75,000.

Older, white households are better prepared than their younger, African American, Asian, or Hispanic counterparts.  Thirteen percent of Hispanic households remain completely unready for the transition, as do 12.5% of African American households.

Geographic Trends
Among the 56 local markets Nielsen measures with electronic meters, Houston has the largest percentage (15.8%) of households that remain completely unready for the transition to digital TV.  In contrast, the Ft. Myers, Florida market, with only 2.4% of homes unready, is best prepared for the switch.

View complete data on digital preparedness in Nielsen’s 56 top local metered markets and 154 local diary markets.

Read Nielsen’s complete report on digital readiness in the U.S.

View the full press release.

Go behind the data: read NielsenWire’s Q&A with Steve McGowan, co-author of Nielsen’s most recent report on the transition to digital TV.

Read coverage of Nielsen’s findings on Bloomberg and in TV Week, Broadcasting & Cable, Multichannel News, Radio Business Report, and Mediaweek.

NielsenWire recently spoke with the co-author of Nielsen’s most recent report on the transition to digital TV, Steve McGowan, Senior Vice President, Insights and Client Research Initiatives, Nielsen.

NielsenWire: How has digital preparedness changed since Nielsen’s last report this past spring?

Steve McGowan:
Not all that much.  Since last May, when 9.8% of homes were “completely unready,” the number has dropped by just 1.4 percentage points — to 8.4%.

NielsenWire: So, how prepared are Americans for the switch to digital TV?

Steve McGowan:
The digital transition in American homes is happening at a casual rate: more than 9 million homes – that’s 8.4% of all U.S. homes – are still completely unready.

Spanish-language broadcast networks are still more vulnerable: 26% of tuning to these networks is done on “unready TV sets” — compared to 15% for English-language broadcast networks.

“Unready sets” are disproportionately found in the kitchen or secondary bedroom, as opposed to the living room or master bedroom, and may not get “upgraded” by February – or ever.

NielsenWire: Which demographics are most — and least — prepared for the transition to digital TV?

Steve McGowan:
Readiness rates are correlated with household income and head of household education.  Overall, we found that a larger proportion of “unready” homes are African American (12.5%) and Hispanic (13.0%).  Homes where Spanish is the primary language are most “unready” for the digital transition. 

Perhaps surprisingly to some, readiness rates are higher in older households.  Some might expect older people to be less ready for the digital transition, but in fact, they are better prepared, on average.

NielsenWire: What findings, if any, surprised you?

Steve McGowan:
With all the attention given to the coupon program for external digital tuner boxes, to date only one-fourth of the sets that were “upgraded” has one of these boxes.  As the transition date approaches, however, more homes may find this to be a better – and lower-cost — option than replacing the set altogether, or signing up for cable or satellite access.

NielsenWire: Why is this report still important?

Steve McGowan:
This series of reports tracks how Americans are responding to the conversion process.  Given the nation’s current economic turmoil, Americans may face additional financial hurdles in replacing or converting unready sets — we’ll be tracking that, as well.  As February 17 approaches, Nielsen will step up our reporting to better anticipate how viewing will be affected by the switch.

Get the latest data on digital readiness in the U.S.

Read Nielsen’s complete report on digital readiness in the U.S.

View complete data on digital preparedness in Nielsen’s 56 top local metered markets and 154 local diary markets.