Sam Sewall, Research Executive, The Nielsen Company

SUMMARY: On June 12, 2009, the Federal Communications Commission (FCC) mandated that all U.S. based television signals must be transmitted digitally. The great majority of U.S. households (97.5%) were prepared for the digital transition in the week prior to the power turn-off. Nielsen data shows unprepared homes were more likely to be minorities, younger, lower income, and were less likely to have Internet access. Most homes acquired a digital converter box to make their television ready for the change.

On June 12, 2009, the FCC required all high-power analog U.S. television stations to turn off their signals and move to a digital-only transmission. A review of the process—and progress—as television households became ready for the analog shut-off reveals the audience impact on stations that shut off their analog signals.

Ready for the switch
By the time the June 12 deadline arrived, most U.S. homes were ready for the conversion to digital. There was a sharp decline in the number of completely unready homes (just 2.5% of U.S. households) for the digital transition in the week leading up to the digital transition. And as of October 4, that number was reduced to 0.5%. Those homes that were completely unready were more likely to be African American, Hispanic, Asian, younger, lower income, and were less likely to have Internet access.

By the end of August, almost three-quarters of unready homes made the switch to digital TV via a digital converter box, 18.2% acquired a cable subscription, and 7.5% received DBS (direct broadcast satellite). The lower income status of completely unready homes likely led them to the federally funded converter box coupon program instead of subscribing to cable or DBS.

Unready and hardly used
In general, unready homes represented just 1–2% of total television tuning before the June 12th transition. Television sets that were not ready for the digital transition were viewed about one-third of the time compared to ready sets. Unready sets were viewed 1.5 hours a day on average, while ready sets were viewed 5.1 hours per day. And in the week leading up to the analog shut off, almost 60% of unready sets had no television tuning at all.

Unready sets were typically found in rooms that are not focal points of television viewing, such as secondary bedrooms, kitchens and other locations. The location of these sets corresponds to the fact that they were used less for television viewing.

Surprisingly, the age profile of unready homes skewed younger than Total U.S. figures. More than half of viewers from completely unready households were under the age of 35—a stark comparison to Total U.S. statistics, where roughly one-third of consumers make up this age cohort. And unready homes were less than half as likely to be over 55 years as the audience in Total U.S. homes.

Audience impact
In total, TV stations that transitioned to digital only experienced an 8% share decline immediately following the analog shut-off. Half of that decline is attributed to a loss of tuning from homes that were completely unready for the digital transition. Additionally, 13% of the prior audience to these stations came from homes with at least one unready set and one ready set. It is likely that the stations lost some audience from these partially-unready homes as well.

Stations that changed channel positions from UHF (ultra high frequency) to VHF (very high frequency) were more impacted, showing a 13% share decline. This change in channel position created challenges in household receivability, since homes with “digital” antennas—which were only capable of receiving UHF signals—were not able to receive VHF digital signals and homes could not receive these channels without performing a re-scan of their converter boxes.

Audience loss from unready set tuning was higher for Spanish-Language broadcast networks than for English-language networks. Immediately prior to the analog shut off, 3% of all people viewing English-language national broadcast networks came from unready sets. That figure tripled for Spanish-language broadcast networks, where 9% of the ratings came from unready sets.

Seasonality also impacts audience
These audience declines were also likely impacted by seasonality—not just the digital transition. Nielsen data shows that TV viewing typically goes down in the summer months. A review of prior years confirms this dip in viewing levels at this same point in the television season.

For the first two weeks following the analog shut-off, transitioning station shares were 8.4% lower than they were in the two weeks prior to transition. In the third and fourth week following the transition, the shares to transitioning stations were 9.3% lower than the pre-transition period.

Based on historical seasonality trends, there is an expectation that stations would have experienced share declines of about 2.4% to 3.6% in the weeks following June 12, 2009. Therefore, the additional 4.1% to 6.1% decline actually experienced in the two weeks following the digital transition is approximately the range of share decline attributable to the digital transition. As the date moves further out from the transition, more of the station declines are attributable to seasonal trends, as the chart below indicates.

The digital future
With super sharp high-definition programming and the ability to show multiple standard definition digital programs simultaneously, digital programming offers many advantages over analog television for viewing broadcast TV. Homes are now capable of receiving more channels than ever before. And a review of pre- and post-transition audience shares to non-simulcast digital sub channels following June 12 show an increase—albeit modest. Nielsen will continue to track growth in these digital sub channels.

As the analog shut-off date becomes more distant, the trends in 2009 are moving closer to the 2007 and 2008 trends—a clear indication that homes are adapting to the new digital landscape and continuing to find their TV content.

% Of Homes Completely Unready For DTV

For additional information including a market-by-market breakdown, download Nielsen’s latest DTV media release.

The number of persons age 2+ in Hispanic TV homes will also grow with estimates showing a 2.4% increase to a total of 44.3 million. The number of persons 2+ in African American TV homes will increase by 1.3% to 37.5 million, and persons 2+ in Asian TV homes will remain at 14.5 million.

Download the full list of Ethnic DMA rankings and universe estimates.

Local TV Market Universe Estimates

The Top 10 local markets, known in the industry as Designated Market Areas or DMAs, will remain the same this season, with a few rank changes in the Top 20. Moving up are Seattle, from 14 to 13, and Denver from 18 to 16. Tampa, Miami and Cleveland are each down one rank.

There were no new markets to enter the Top 50 or the Top 100, although there were several multi-rank increases and decreases. Notable changes in the Top 100 markets include:

• Four Florida markets are down (Tampa, Miami, Ft. Myers, Tallahassee), partially due to declines in domestic migration
• New Orleans has the largest percentage increase among all markets, up 5.2% from last year, and moves up 2 ranks from 53 to 51 as former residents return to the city and Census Bureau estimates are adjusted
• New York adds the most homes of any market (+59,710) while Waco shows the largest change in ranks, moving from 94 to 89
• Other multi-rank increases in the Sun Belt region include Tucson (+2), Shreveport (+2), and Charleston, SC (+2)
• The Midwest sees multi-rank decreases in Columbus, OH (-2), Grand Rapids (-2), Flint (-2) and South Bend (-2)

For complete details, download the full list of DMA rankings and universe estimates.

% Of Homes Completely Unready For DTV

For additional information including a market-by-market breakdown, download Nielsen’s latest DTV media release.

The June 12 transition to digital broadcasting was an important milestone for all of us who work in the television industry. For Nielsen, the transition went very smoothly thanks to a year of planning and the close cooperation of our broadcast clients.

Because our metered panels are representative of U.S. television households nationwide and in individual local markets, Nielsen was able to track the country’s progress in preparing for the digital switchover. In January 2008, 10.5% of households were “completely unready” for digital television (i.e. none of the TV sets in their homes were capable of receiving digital television). Armed with this information, we began communicating with key leaders in the government, the television industry, and the news media — including 400 publications and radio stations that serve African American, Hispanic and Asian communities.

Thanks to significant public awareness campaigns by these and other groups, only 2.2% of households were unready for digital television at the time of transition.

Even though the transition took place over a month ago, we continue to look at the impact that digital television has had on consumer access to and viewing of television.

• Since June 12th, the number of completely unready homes continues to drop and now stands at only 1.3% of television households. Based on a recent survey of the non-digital homes, we expect to see continued improvement in the weeks ahead as these homes continue to figure out what they must do to be able to receive digital television. When asked, virtually all these homes surveyed said they were planning to switch to digital television, either by converter box, or cable/satellite subscription.
• Among those TV sets that became digitally ready in the few months just prior to June 12th, 77% were connected to a digital converter box, 19% to cable and 4% to DBS. This contrasts greatly to trends seen in the very early months, when the majority of the transitioning homes acquired cable or satellite in order to receive over-the-air television.
• As of June 28, 60% of completely non-ready homes were still able to view some television by watching a low power station, a foreign station near the Canadian or Mexican borders or a U.S. broadcast station that is available to them via a “translator.” (Translators have been used for years to deliver signals to remote areas of the country.) As a consequence, television viewing in these homes has not disappeared completely, although viewing choices are extremely limited.
• Those stations that transitioned on June 12th saw some decline in viewing in the two weeks immediately following the transition compared to the two weeks prior. Stations that changed their digital signal from UHF to VHF were most affected. This is because some digitally ready homes had to rescan sets or converter boxes. Others had to acquire a new antenna that received both UHF and VHF digital signals. However, this decline in viewing was largely temporary and in recent weeks we have seen audiences returning. As more homes sort out problems with antennas and converters this return to prior levels should continue.

In sum, the digital transition seems not to have had a major impact on viewing levels. People still watch a significant amount of television and we believe the small number of households that remain without digital television will eventually make the switch-over from analog television.

% Of Homes Completely Unready For DTV

For additional information including a market-by-market breakdown, download Nielsen’s latest DTV media release.

% Of Homes Completely Unready For DTV

% of Homes Completely Unready

Read the complete media alert with market-by-market breakdown.

% OF HOMES COMPLETELY UNREADY

Date	Total	White	African American	Hispanic	Asian	Under 35	Over 55
June 14, 2009	2.2	1.6	4.6	3.6	3.2	4.4	1.1
June 7, 2009	2.5	1.9	5.1	4.3	3.1	4.6	1.3
May 24, 2009	2.7	2.1	5.4	4.7	3.2	5.0	1.5
May 10, 2009	2.9	2.3	5.7	4.9	3.4	5.4	1.6
April 26, 2009	3.1	2.4	5.9	5.0	4.1	5.7	1.7
April 12, 2009	3.2	2.5	5.9	5.4	4.3	5.9	1.7
March 29, 2009	3.4	2.7	6.2	5.6	4.4	6.3	1.8
March 15, 2009	3.6	2.9	6.6	6.1	4.4	6.5	2.0
March 1, 2009	3.9	3.2	6.7	6.5	4.5	7.2	2.2
February 15, 2009	4.4	3.6	7.5	7.4	5.1	8.1	2.6
February 1, 2009	5.1	4.1	8.7	8.5	6.3	8.6	3.2
January 18, 2009	5.7	4.6	9.9	9.7	6.9	8.8	4.0
December 21, 2008	6.8	5.6	10.8	11.5	8.1	9.9	5.2
Source: The Nielsen Company

Read the complete media alert with market-by-market breakdown.