“The FCC should proceed cautiously in evaluating the need for regulation,” said Whiting.  “Consumers increasingly choose to view their favorite shows from many different sources and incorporate media in their lives in many new ways.  Content owners need flexibility to adapt to these changes and meet consumer demand across all platforms.”

Whiting appeared as part of a panel about online video distribution considerations at a FCC forum in Chicago regarding the proposed merger of NBC Universal and Comcast.  While taking no position on the proposed merger, Whiting briefed the commission on the evolving media landscape by sharing Nielsen’s data on video consumption by the American public in an effort to give it a better understanding of the current and future market for video content.

“Over the last four years, we have seen the continuing increase in the integration of media platforms for the distribution and consumption of video.  Consumers want and expect to get video when they want it, where they want it and are willing to use whatever devices works best for them,” concluded Whiting.

Download Susan Whiting’s complete prepared remarks to the FCC.

Read Nielsen’s most recent Three Screen report.

“Consumers are driven by the convenience and quality that today’s technology now enables,” said Matt O’Grady, Executive Vice President, Audience Measurement. “New mobile devices and enhanced TV quality allow viewers to engage in more content than ever before.”

More than half of US TV households now have HDTV, up 189% from the first quarter of 2008, and more than one-third now have DVRs, up 51%.  High-speed broadband Internet access, now in 63.5% of homes, has created a better user experience for watching online videos and nearly a quarter of households have smartphones, enabling consumers to “place shift” and watch video wherever they are.  Despite the common perception that viewers of videos on mobile phones are predominantly teens, more than half (55%) are adults aged 25-49. While mobile online video viewing is still fairly limited, year over year growth is notable at 51.2%.

TV still remains the preferred screen of choice: viewers watched 2 more hours of TV per month in the first quarter of 2010 compared to the same period a year prior (158:25 vs. 156:24).  They are also continuing to simultaneously use the Internet while watching TV, with the average time spent doing both activities up 9.8% to 3 hours and 41 minutes.

As of Q1 2010 the 292 million people in the US with TVs spend on average 158 hours, 25 minutes each month tuning into television.  Q1 2010 data shows that 138 million people watching video on the Internet spent on average 3 hours, 10 minutes during the month doing so.  As of 1Q10 the 20.3 million people who watch mobile video in the US spend on average 3 hrs, 37 minutes each month watching video on a mobile phone.

• Download Nielsen’s latest Three Screen Report.

“The rise in simultaneous use of the web and TV gives the viewer a unique on-screen and off-screen relationship with TV programming,” said Nielsen Company media product leader Matt O’Grady. “The initial fear was that Internet and mobile video and entertainment would slowly cannibalize traditional TV viewing, but the steady trend of increased TV viewership alongside expanded simultaneous usage argues something quite different.”

Behind The Rise in TV and DVR Use

Each week, on average, Americans watched roughly 35 hours of TV and two hours of timeshifted TV via a DVR. The growth in viewing is due to a number of factors:  The DVR brings added convenience while high definition programming and flatscreen TVs have boosted the quality of the experience.  Digital delivery, via cable or satellite, is delivering more channels and more choice to the home than ever before.

DVRs, now found in 35% of American households, continue to gain popularity. Those age 25-34 watch nearly three hours a week of timeshifted TV, while those age 65 and older watch just more than an hour.

Growth in Online and Mobile Viewing
Online video consumption is up 16% from last year. Of note, approximately 44% of all online video is being viewed in the workplace.  The research shows that Americans watch network programs online when they miss an episode or when a TV is not available.  Online video is used essentially like DVR and not typically a replacement for watching TV.

Active mobile video users grew by 57% from the fourth quarter of 2008 to the fourth quarter of 2009, from 11.2 million to 17.6 million.  Much of this increase can be linked to the strong growth of smartphones in the marketplace.

“It seems that, for the foreseeable future at least, America’s love affair with the TV will continue unabashed,” said O’Grady. “We seem to have an almost insatiable appetite for media, with online and mobile programming only adding to it.”

For complete data and methodology, download The Nielsen Company’s Three Screen Report.

UPDATE – 12/18/09: This article on the A2/M2™ Three Screen Report and related documents have been updated to include data from the full time period of the quarterly report, resulting in increased numbers for in-home, and time-shifted TV viewing. The previous report did not include viewing from the first week of the new Television Season.

Nielsen’s latest A2/M2™ Three Screen Report – a quarterly analysis from our Anytime Anywhere Media Measurement™  initiative – shows considerable year over year growth in terms of time spent for DVR (up 22.5%) and online video (up 34.9%) in Q3 2009. Given the consistent spike in usage among the three screens of television, Internet and mobile, consumers are clearly adding video platforms to their schedule, rather than replacing them.

“Americans today have an insatiable appetite for not only content, but also choice,” says Nic Covey, director of cross-platform insights at Nielsen. “Across all age groups, we see consumers adding the Internet and mobile devices to their media diet — consuming media anytime and anywhere possible.”

What We Watch Weekly
For the first time this quarter, Nielsen reports how much time the average American spends in a typical week with TV, Internet and mobile devices. Without a doubt, consumers of all ages spend the majority of their video time (nearly 99%) in front of the television, while DVR and online video are becoming more widely used.

• In 3Q09, the average American watched more than 31 hours of TV per week, with 32 minutes spent in playback mode with their DVR.
• In addition, each week the average consumer spent a little more than 4 hours on the Internet and 22 minutes watching online video.
• The average consumer spent 3 minutes watching mobile video each week.

The TV and Internet figures in this report are calculated using Nielsen’s National TV and Internet panels, which are measured electronically and reported on a regular basis. The Mobile phone figures are collected by Nielsen via a quarterly survey and give a firsthand look at how early adopters self-report their usage of mobile video.

Other Highlights of the Report

• Almost 99% of video content watched in America is still done on traditional television
• DVR and Online Video continue to show solid growth – up 22.5% and 34.9% respectively in time spent from Third Quarter 2008
• Teens continue to watch mobile video the most, at just over 7 hours per month, though mobile video is not just a young medium, as mobile users Adults 45-54 report viewing nearly 3 hours of video on their mobile phones

• Download Nielsen’s A2/M2™ Three Screen Report

Jim O’Hara, President, Media Product Leadership, The Nielsen Company

The Findings

One of our primary tools for observing three screen behavior has been the TV/Internet Convergence Panel, which is made up of 1,000 households in the U.S. that formerly participated in our TV ratings panels. These households, accounting for almost 3,000 people, were asked to install a Nielsen software meter on their computers in addition to the meters these households had already permitted us to install on their televisions, enabling us to measure both Internet and television activity.

What we have found to date is that despite the initial presumptions and fears of some, media consumption has actually increased. Each of the three screens has its benefits and people are using them as complements, not as substitutes, for one another. With respect to TV and Internet usage, we found that a fair number of people are doing both simultaneously, though in relatively small increments per day – an average of ten minutes per day per person. In our multitasking culture, watching TV while checking e-mail or surfing the Internet has become more and more common: more than half of our panelists had some simultaneous activity. Among that group, 3.7% of the time they were watching television they were also on the Internet and 31.6% of the time they were online they were also watching television. What was rather unexpected was that this behavior was not limited to any one age demographic: a teen was as likely to be engaged in simultaneous usage as was someone 54 years old. And the amount of time they were doing this was comparable.

So who is sharing their time online with TV? Women age 25 and over and persons 35 and up are most likely to juggle the two media. Further, they tend to be above-average consumers of each platform. Simultaneous users watch 14 percent more TV a day and use the Internet 61 percent more than the average consumer. Clearly, during that expanded timeframe they are exposed to a large number of ads and the opportunity to reach them is greater.

Implications for Marketers

Until fairly recently, marketers would develop campaigns based on the individual medium – one for TV and another for the Internet. Often times, these campaigns would bear little resemblance to each other. But today, we know that doing so risks passing up an opportunity to reach a captive audience. The simultaneous usage phenomenon presents new marketing opportunities: the unique strengths of each medium can be leveraged to allow consumers to be reached – and allow them to reach back – in ways that they choose themselves.

For example, TV can deliver the call-to-action via advertising. The Internet can provide a convenient venue for the action, and enable the consumer to get more information about or actually purchase a product or service. Advertising that takes advantage of this linkage of platforms is already being implemented with particularly strong results.

To gauge the effectiveness of this concept, we looked at a few traditional retailers during the 2008 holiday season to see which of them were most successful in stimulating cross-platform behavior. In December, the highest percentage of people who watched TV while using retailer web sites went to Target.com Target was also among three retailer web sites (second to Walmart and before Best Buy) that were uniquely able to draw a high percentage of simultaneous Internet and TV users – 3.8 percent. Visitors to its web site were more likely to be watching TV while at the site, and 10.2 percent of Target.com visitors said that they had seen a Target commercial on TV. Based on these figures, it seems clear that the simultaneous use of the two media had a measurable effect on behavior.

All signs are that media consumption across screens will continue to grow. Advertisers and media outlets that develop ways to capitalize on consumer cross-platform experiences and leverage the strengths of each will likely benefit. Now more than ever, a call-to-action – be it to visit a web site for more information or to make a purchase – can yield an immediate reaction from the consumer using both TV and Internet. But regardless of the medium, the key to successful marketing is having the right message that can make a real impact with the target audience the advertiser wants to reach. With increasing numbers of consumers expanding their use of media, marketers have more opportunities than ever to do so.

We are now expanding the scope of the Convergence panel to include measurement of video viewing on mobile phones. So expect more from Nielsen on simultaneous usage, cross-platform measurement and marketing implications as the three screen evolution continues.

When it comes to making television programs available online, many companies are testing the consumer adoption of different business models and the technology required for each. In recent months we’ve heard about initiatives such as “OnDemand Online” and “TV Everywhere” from Comcast and Time Warner Cable, respectively. The goal is to make available TV shows online to authenticated cable subscribers, at no cost, in the format that each show was originally presented on television – the same program, the same national commercials. These initiatives have received a lot of support from cable and broadcast network programmers.

OnDemand Online, TV Everywhere and similar offerings could provide the best way for video content providers to monetize TV programs online. Importantly, these initiatives are very compatible with Nielsen’s television ratings system; that is, online audiences viewing these programs could be included in Nielsen’s TV ratings.

At Nielsen, OnDemand Online and TV Everywhere are examples of what we refer to as the “Extended Screen” — initiatives that treat the computer as another screen in the home used to watch television. In fact, we’re already working to capture television viewing that takes place online and to add that viewing back in to the ratings. That includes in our National C3 ratings.

How will we be able to do this? It’s all part of our Anytime Anywhere Media Measurement (A2/M2) initiative. Nielsen has developed an Internet software meter that uses the same technology to measure video viewing online as the Nielsen Active/Passive (A/P) Meter does for television. We’ve currently installed this Internet software meter among 375 homes in our National People Meter panel, allowing us to evaluate the measurement of Internet usage alongside TV usage. Given that more than $70 billion of television advertising is bought and sold using Nielsen ratings, we are careful not to take any actions that would dilute the reliability of the core television ratings data. Consequently, we are undertaking an extensive evaluation program before fully integrating television and Internet measurement.

The results of our evaluation show tremendous promise to date. We are positioned to start the roll out of the Internet meter to all People Meter households before the end of this year, with complete installation in 2010 and full implementation in early 2011. In the meantime, we will continue discussions with all our clients about their Extended Screen initiatives and will work with MSOs and programmers to support their tests of OnDemand Online and TV Everywhere. We will also continue our work on other TV/Internet cross platform initiatives such as the TV/Internet Convergence Panel, our TV/Online data fusion and our measurement of online video through VideoCensus. Additionally, we have deployed the Internet software meter to our online panel of over 230,000 individuals to further measure program usage online.

Though no one knows for sure which business models for online video will emerge as the most successful, Nielsen will be prepared to measure audiences no matter which ones prevail.

Updated 12/18/09 to reflect full time period.

Americans are increasing their overall media consumption, and media multi-tasking is part of the equation, according to new data from The Nielsen Company’s most recent Three Screen Report. During 2nd Quarter 2009, the number of people watching mobile video increased 70% from last year and people who watch video online increased their viewing by 46% compared to a year ago. In addition, the average American TV consumption remains at an all-time high (141 hours per month) compared to the same time frame last year.

“Although we have seen the computer and mobile phone screens taking on a significant role, their emergence has not been at the cost of TV viewership,” said Jim O’Hara, President, Media Product Leadership, The Nielsen Company. “The entire media universe is expanding so consumers are choosing to add elements to their media experience, rather than to replace them.” Nielsen data also shows Americans are using DVRs more than ever, watching one hour more of timeshifted TV each month than a year ago. Currently, 30% of homes in the U.S. have DVR devices.

The Simultaneous TV and Internet Experience

Nielsen’s Convergence Research Panel, launched in 2008, provides single source electronic measurement of TV and Internet usage in the same homes. As of June 2009, this panel shows 57% of consumers with Internet access at home watch TV and go online simultaneously at least once a month. On average these consumers spend 2 hours, 39 minutes each month simultaneously using the Internet while also watching TV. Their online experience at home is in front of the television almost a third of the time.

Other Key Facts and Trends

• As Americans continue to watch more TV each year there are also more TVs in each home than people – in 2009 the average U.S. home had only 2.5 people vs 2.86 television sets. 54% of Americans have three or more TV sets in the home. (link to universe estimates)
• Online usage is relatively flat since last year, though more people are viewing video online than ever before. Certain age groups also view online video more than others do – Adults 18-24 watch more than 5 hrs each month vs. Adults 65+ watching just over 1 hr of online video.
• Short form video (such as YouTube clips) still makes up the lion’s share of online video viewing – 83% in May 09 – while name-brand TV network content comprises the majority of mobile video viewing.
• Younger demographics aren’t using the Internet as much as older demographics, yet the growth rate of kids 2-11 online clearly outpaces the overall Internet penetration. The number of kids online has increased 18% compared to 10% growth for the total active Internet universe (P2+).
• Mobile video viewing continues its upward trend, with over 15 million Americans reporting watching mobile video in Q2 2009. This is an increase of 70% versus last year – the largest annual growth to date.

Download Nielsen’s complete Three Screen Report for complete details and methodology.

As fans discussed the emotional and musical details of the memorial, the media coverage and the integration between television and the internet was also a major topic. Nearly 15% of all online discussions about Jackson referenced either a broadcast or social network.

CNN which teamed up with Facebook on streaming coverage was named in 5% of all online conversations. Also on the TV network side, BET came in 2nd with 1.9%, ABC with 1.7%, MTV with 1.44%, NBC/MSNBC with 1.43%, Fox with 1.38% and CBS with 1.0%. Among social networks, Twitter was the most discussed social networking site with 2.4%. Facebook was mentioned in 2% of the conversations, followed by Youtube (1.9%) Myspace (0.6%) and Hulu (0.3%) which streamed FOX News coverage.

“While events like the Jackson memorial, or the Obama inauguration are unique, the way consumers are multitasking between media is quickly becoming the norm,” says Charles Buchwalter, Senior Vice President, Research & Analytics, Nielsen Online. “Even as recently as five years ago, the only choice for community was to gather around the TV screen with co-workers or friends for major events. Now, there are three screens to choose from and, as our research shows, online activity actually reinforces TV viewing. So when outlets like CNN integrate their coverage with Facebook or MSNBC leans heavily on Twitter it demonstrates the public’s growing integrated use of TV, the web, and mobile for getting, and at times reporting, the news.”

Twitter Doesn’t Fail Tweeters

Terms and tags such as #MJ and #Michael Jackson dominated the top trends on Twitter.com yesterday, July 7, 2009. Interestingly, even the misspelling of the King of Pop’s first name as “micheal” also topped trends throughout the day.

Users watch the events of the day unfold on TV and online, often “tweeting” about the coverage offered by various media outlets. Since many were limited to watching coverage online while at work, Twitter featured frequent links and recommendations for live video feeds, most commonly CNN’s live feed with Facebook integration, followed by CBS News/Ustream, MSN, and MSNBC.

During the memorial service, recommendations and links to video stream slowed down, and viewers began to focus more of their “tweets” on the performances at the service, only distracted by news that social media sites Facebook.com and Twitter.com were out of capacity and/or had crashed. However, CNN.com did continue to be the most recommended live feed during programming. Following programming, recommendations shifted to video recordings posted on YouTube.com.

Recently, there’s been a fair amount of buzz about supposedly new and revolutionary ways to measure audiences online. Just this week, a press release from a competitor promised that their new “hybrid” methodology (panel + census) will provide “a comprehensive accounting of the complete digital media universe.”

The Nielsen Company has long believed that using panel and  census data – the best of both worlds – is a great way to measure the Web, especially in the increasingly layered, three-screen world. In fact, we were the first to commercialize the hybrid approach in markets around the globe and in the U.S. in 2007 with our VideoCensus product.

To learn how VideoCensus provided a new measurement standard, click here.

Experience and integrity in research have never been more important.

New forms of audience measurement need to be created openly and transparently, with the industry. Nielsen’s hybrid systems have been built in conjunction with local industry bodies and the market itself. We worked tirelessly to educate the U.S. market in advance of our VideoCensus launch and it is the reason why we are pursuing Media Ratings Council (MRC) accreditation for our new system to be launched later this year.

Server data is complex and its analysis is complicated, to say the least. Any company that specializes in server data has a deep appreciation of this fact. Analyzing this data is a skill set that can’t be obtained overnight. Nielsen’s decade of experience with server measurement in the market is essential in making a hybrid methodology work.

In about a month, Nielsen will launch a new approach to panel measurement that will deliver the most reliable portrait of Web audiences to advertisers and publishers to date. This isn’t because of the sheer size of the panel, it’s because of the quality. The panel will provide an incredibly stable foundation for other exciting Nielsen audience measurement.

Like the foundation of a home, the panel component of a hybrid measurement system is vital, as is the ability to understand and reconcile results with server data. With a solid foundation, you can live in a home for years. Start with a shaky foundation, and the home isn’t worth the monthly mortgage payment.

Know your foundation. Build your business on responsible research.

Nielsen’s VideoCensus provides timely statistics and insights into how consumers use video online.  This includes the size and demographic composition (age, gender, race, etc) of the viewing audience for each website, as well as important measurements like the total number of streams viewed and the time spent watching by the average viewer. All this information helps content providers and websites more effectively sell their assets and audience, while providing tools for advertisers trying to decide where to place an online video campaign.  In assembling this information, we use a number of different measurement technologies, each with its own advantages.

Why Nielsen uses samples to collect its research

• The only way to really report audience demographics (the age, gender, race and other characteristics of the person viewing video) is to actually measure what people – not computers – watch.  Because it is not possible to track the viewing of every user on every computer in the U.S., the best way to tell how many people are watching online video is to select a representative cross-section of the entire Internet population, monitor their viewing, and project the results to the population as a whole.  Just as a doctor only draws a small sample of blood to measure red and white blood cell counts, so too does Nielsen use samples (or panels) to measure Internet use.  Nielsen uses the same principles to measure TV ratings and consumer buying patterns.
• The key to accurate sample measurement is to create a panel in which every member of the population has an equal chance of being selected.  This ensures that the panel proportionately represents men and women, teens and adults, high and low income individuals, employees of large and small companies, and so on.  It’s also essential to represent both heavy and light users in proportion to the entire population.  If, for example, only heavy users were represented in our samples, our estimates would be too high and if only light users were selected our estimates would be too low.

How Nielsen’s VideoCensus panels are assembled

• Nielsen recruits its panelists through a number of methods, including email, online advertising, telephone calls and postal mailings.. Other Internet measurement companies rely exclusively on online recruitment, which skews the sample towards heavy users and typically overstates Internet activity.  Nielsen’s combination of recruitment tactics captures a broader spectrum of demographics and consumer behavior.
• The VideoCensus panel is composed of two separate samples:

– Nielsen recruits a very large sample through e-mail and online advertising.  The sample includes hundreds of thousands of households and allows for very granular measurement.  To make sure the information from this sample reflects the population as a whole, we adjust the data collected from this sample with a second, more representative Calibration Sample.

– The Calibration Sample is created by randomly identifying and actively recruiting panelists through their street addresses and phone numbers.  We are in direct contact with these panelists and pay them for their participation.  These are the same methodologies used to recruit TV ratings panelists. The “randomness” of this sample means it includes both heavy and light Internet users across all demographics, and is therefore more representative of the entire Internet universe. The combination of these two panels gives us the depth of a large sample balanced by the industry’s only truly random calibration sample.

How Nielsen collects Internet data from panels

• After panelists agree to participate in our panel, they install a Nielsen software “meter” on their computer, which enables Nielsen to measure their online and computer usage. When a panel member views a video, the meter communicates information about that activity to Nielsen. The panelist’s demographic information, the stream URL, and other site information are processed and reported within the VideoCensus system. (Note: Nielsen does not sell or publish user information.)

How Nielsen collect actual ‘Census’ viewing behavior

• Nielsen also directly measures the number of times a particular video is played. To improve the accuracy of this measurement, video networks or broadcast sites can embed a code or “tag” in their video players.  This process causes all viewers of content to send an anonymous ‘ping’ to Nielsen.  This so-called ‘census’ measurement makes it easy for Nielsen to identify and report the actual content or program being consumed, and allows us to report an actual count of times that content is played back.

Why Nielsen combines panel and website data

• Nielsen’s panel data provides the audience demographics of viewers, which is the industry’s ‘currency’ for media planning.  Census measurement provides the actual count of the times content is consumed and is typically the method used by online publishers and advertisers for selling and buying impressions.
• Nielsen combines the datasets and provides reporting that includes unique viewers, total streams, demographic composition, and time spent viewing.

Why Nielsen’s data differs from the clients’ internal server-based counts

• The most frequently debated number in online measurement is unique audience.  Website analytics systems (what we call ‘internal’ data) count cookies or Internet browsers, but not people.  These systems overstate audience for a number of reasons.
• If you visit a website from home and from work, generally that website counts you as two visitors.  If you regularly delete your cookies, each time you visit that website you’ll be counted as a new visitor.  Panel data collected by Nielsen, by contrast, measures actual people and projects their activity to a carefully enumerated Internet universe.

Why Nielsen’s numbers are usually lower than those from other measurement companies

• Because our randomly selected Calibration Panel includes both heavy and light users, our data is a more accurate reflection of the entire online universe.  Other measurement companies create their panels from people who answer online solicitation and who tend to be heavy users.  As a result, other measurement companies sometimes report numbers that are even higher than the internal server counts from the websites they are measuring.