Broadband Cable Association of Pennsylvania

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February 22, 2013

For media executives, there may be nothing worse than a viewer or listener who is not counted.

On Thursday, in a move that might help ease those concerns, Nielsen said that it would start considering Americans who have spurned cable, but who have a television set hooked up to the Internet, as "television households," potentially adding to the sample of homes that are rated by the company, the standard for television ratings. In front of skeptical network officials, the company pledged to measure TV viewership on iPads and other mobile devices in the future. Those executives have a gnawing feeling that their consumers are being missed more and more often. As new pipelines open up for viewers and listeners through social media, mobile apps and game consoles, advertisers fret that they don't know how many people are really seeing their ads, television networks fear they're not getting credit for getting those people to tune in and record companies wonder how they can keep up with all the ways their customers consume music.

These problems will only worsen in the years to come as new technologies further erase the boundaries that once existed between television and Internet; newspaper and cable news network; video and article. Nielsen's move was announced a day after Billboard said it would start including YouTube streams in its calculation of the most popular songs of the week. That shift immediately vaulted "Harlem Shake," a modestly selling hip-hop single that has become a viral video sensation, to the top of the charts. Nielsen's decision was the culmination of two years of thinking, a painfully long time for media executives. Their collective sense of urgency has increased as new Web services like Aereo have allowed people to watch TV channels, ads and all, without a cable subscription or an antenna.

The new definition "will include those households who are receiving broadband Internet and putting it onto a television set," said Pat McDonough, the senior vice president for insights and analysis at Nielsen. Currently a "television set" is the flat-screen kind, but in the future a tablet computer like an iPad could also be considered a TV set. Nielsen's decision won't have an immediate impact on the ratings system that governs billions of dollars in advertising decisions, because just 0.6 percent of households in the United States meet the new description. As that statistic shows, a large majority of households have chosen not to cut the cable TV cord to date. But predictions of "cord-cutting" continue to resonate; the Dish Network chief Charles Ergen said earlier this week that "I think cord-cutting is here to stay and will accelerate over time" as customers reject increases to their monthly bills. By beginning to count Internet-only homes, Nielsen is trying to get ahead of the change.

In some media corners on Thursday, the reaction was summarized in a word: Finally. Television executives who have long prodded Nielsen to evolve - and been disappointed before - said they would wait and see how far the company actually goes in counting online views. Right now, most Internet views of their shows are not counted in the TV ratings that serve as a kind of nationwide popularity contest, either because there are no ads attached (see Netflix) or because the ads are not exactly the same as the ones that appeared on the original TV broadcast (see Hulu). But new services are popping up that stream TV shows and ads without the need for cable.

Aereo, which is available in New York and is expanding to other cities, is one. NimbleTV, which is in a test phase, is another. Further into the future, Intel is planning to start a cablelike subscription service that will be delivered over the Internet, and a bevy of other companies are interested in doing the same thing. If and when these services steal customers away from cable, advertisers will need to know if their spots are being seen and Nielsen will need to track it. Alternatively, cable companies and the owners of cable channels are trying to keep customers by streaming shows in a manner known as TV Everywhere. In some cases, these services need to be rated, too.

Ms. McDonough said in a telephone interview on Thursday that viewing on Aereo would now be included in the Nielsen ratings sample. Theoretically, a cablelike service from Intel would be included, too. The new definition also applies to homes that have cable but also have extra TV sets that are hooked up only to PlayStations, Rokus or other Internet devices. The changes emanated from a measurement committee comprising Nielsen executives and two dozen representatives from networks and advertising firms. The committee met in New York on Tuesday and discussed Nielsen's proposals. They were subsequently obtained by The Hollywood Reporter.

The proposals, Nielsen said in a statement, were necessary to "more completely reflect media consumption." There is intense anxiety about the ratings at the major television networks because, in some cases, their ratings are evaporating before their eyes. The culprits include digital video recorder use, delayed viewership thanks to the existence of Netflix and other online sources, and increased competition from other channels and the Internet. Counting the small sliver of homes that have Internet-connected TVs, but not cable, will not make a big difference in the short term. Then again, as Ms. McDonough put it, "It's up to the networks to decide how best they want to monetize their content." If a network like ABC decided to run the same commercials with "Modern Family" on TV and on Hulu and on ABC.com and on its app, Nielsen would count all those views equally. New York Times; more on Nielsen's move into broadband measurement in Associated Press, Wall Street Journal and Los Angeles Times


News Corp.'s Fox Broadcasting unit asked for a court order to block new "on-the-go" features of Dish Network Corp's Hopper set-top boxes that allow consumers to watch live and recorded TV shows on smartphones and tablets. Fox sought a preliminary injunction yesterday in federal court in Los Angeles. Fox alleges the new services breach its license agreement with Dish and infringe the network's copyrights. "Paying Dish for a satellite television subscription does not buy anyone the right to receive Fox's live broadcast signal over the Internet or to make copies of Fox programs to watch 'on the go,' because Dish does not have the right to offer these services to its subscribers in the first place," Fox said in the filing.

Fox last year failed to persuade a federal judge to block Dish's AutoHop service that lets viewers automatically skip the ads in recorded primetime television shows. The network appealed that decision to the U.S. Court of Appeals in San Francisco, which hasn't ruled on the issue. The new features in the second-generation Hopper set-top box send live broadcast signals over the Internet to subscribers' personal computers and mobile devices and also allow subscribers to copy recorded programs from the digital video recorder to their iPads, Fox said. Bob Toevs, a spokesman for Englewood, Colorado-based Dish Network, didn't immediately return a call yesterday after regular business hours seeking comment on Fox's filing. A hearing on Fox's request is set for March 22, according to yesterday's filing. Bloomberg


An activist shareholder in The Outdoor Channel thinks the media company is worth more than $8 a share in cash and stock - and stands ready to put its money where its mouth is, The Post has learned. UTR, an outspoken critic of The Outdoor Channel's merger with InterMedia Outdoors - which values TOC at $8 a share in cash and stock - said yesterday it and deep-pocketed backers are ready to make an all-cash bid that tops the existing offer. UTR would not name the investors - except to say they are hollywood heavyweights. TOC in November agreed to a $208 million merger with InterMedia Outdoors, which runs the The Sportsman Channel.

TOC's founding family and directors control 43 percent of the stock, and plan to vote their shares in the March 13 shareholder vote. InterMedia will wind up with 68 percent of the combined business. TOC reaches 36 million US households - which it claims makes it the country's largest hunting and fishing channel. UTR, which in a letter to TOC's board last week said it owns a greater than 2 percent stake in the company, asked the founding Massie family to recuse themselves from the vote. With the Massie family support, the merger is all but certain to be approved.

A TOC spokesman said the company's board believes the proposed merger would give the combined channels more power with cable companies and advertisers - and is therefore better for shareholders than an outright sale at prices it has received up to this point. "The board firmly believes that it has acted in a manner that is consistent with its obligations to its stockholders throughout the process, and will continue to act in a manner consistent with its obligations to its stockholders and its obligations under the merger agreement," the spokesman said. Outdoor's shares closed yesterday up 0.5 percent at $7.61. New York Post


Cablevision Systems, the New York based cable television operator, will begin charging an additional fee of $2.98 per month starting April 1 to cover rising costs for sports programming. "We have not raised our cable television prices in more than two years," Bradley Feldman, Cablevision's vice president of video product management, said in a statement Thursday. "Unfortunately, the rising cost of programming has resulted in this sports surcharge, which is similar to those introduced by other TV providers." The fee applies to all of Cablevision's subscription packages except its Broadcast Basic package and its Optimum Economy offer. At the end of last year, DirecTV said it had started charging an extra $3 in some of its markets to pay for regional sports networks. Cablevision, which is controlled by the Dolan family, said it will also raise the pricing of its Spanish-language package by $2 per month and its commercial video rates by $4 per month. Reuters


State Sen. Anthony Hardy Williams stopped just short this week of endorsing U.S. Rep. Allyson Schwartz if she challenges Gov. Corbett next year. After all, Schwartz isn't even a declared candidate yet. "I told her she could use my name in a fond and affectionate way," Williams told us. One person probably not using his name that way this week: state Treasurer Rob McCord. McCord is the other heavyweight in the state's Democratic camp considering ways to deny Corbett a second term. Williams, who finished third in the 2010 Democratic primary election for governor, said that Schwartz called this week for his advice. He predicted that "nobody else major" would get into the race if she decides to run. What about McCord? Williams said he had no doubt that McCord would step aside. "I think that Rob basically wants to be anointed and have it given to him," Williams said of the Democratic nomination. "He wants a lot of money and a clear field. I don't think he'll go head-to-head with Allyson."

The reaction from McCord's camp was swift, if not certain. "What candidate doesn't want a lot of money and a clear primary?" asked McCord spokesman, Mark Nevins. "Rob has met with Senator Williams, and the senator knows that when Rob makes his announcement, it will be based entirely on whether Rob wants to be governor," Nevins continued. "No other candidate, including Congresswoman Schwartz, will have any bearing on that decision." John Hanger of Hershey, who served in former Gov. Ed Rendell's Cabinet, is the only Democrat who has declared his gubernatorial candidacy. Tom Wolf, another Rendell Cabinet member, is mulling a run. McCord, who won a second four-year term in November and lives in Bryn Mawr when he isn't in Harrisburg, had $1.6 million in his campaign coffers as of Dec. 31. Schwartz, who won a fifth two-year term in November and lives in Jenkintown when she isn't in Washington, had $3.1 million in the bank at the end of the year. Philadelphia Daily News

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