U.S. Homes With TV Sets Drops for First Time in 20 Years

While Nielsen cites the economy as a key driver, the latest data may also revive the cord cutting debate.

NEW YORK -- The number of U.S. households with TV sets has declined for the first time in 20 years driven by poverty and young people’s consumption of content online, Nielsen said on Tuesday.

The latest data from the company, which takes TV set ownership into account when it calculates ratings, shows that 96.7 percent of U.S. homes own a TV set, down from 98.9 percent as of its previous count. There are now 114.7 million TV homes, compared to 115.9 million, Nielsen estimates as it gears up for the 2012 TV season.

Some low income homes – particularly in rural markets - can no longer afford TV sets, while some younger Americans don’t buy TV sets when they graduate from college or start working - at least not right away, Nielsen said in citing possible reasons for the decline. It also cited the transition to digital TV in 2009 as a potential factor. Nielsen did not detail what proportion of the decline in homes with TV sets can be attributed to each of these reasons.

Cable operators have been faced with investor concerns about possible cord cutting, which could be renewed amid the report. But Nielsen said young consumers without TV sets not only include cord cutters, but also people who have never subscribed to pay TV services.

“While Nielsen data demonstrates that consumers are viewing more video content across all platforms - rather than replacing one medium with another - a small subset of younger, urban consumers seem to be going without paid TV subscriptions for the time being,” Nielsen said. “The long-term effects of this are still unclear, as it is undetermined if this is also an economic issue that will see these individuals entering the TV marketplace once they have the means, or the beginning of a larger shift to online viewing.”

Overall, Nielsen mostly blames the economy for the decline in TV sets for now. The previous decline in the number of homes with TV sets in 1992 was also temporary and a result of a prolonged recession.

Pat McDonough, senior vp, insights and analysis at Nielsen, said: "The media marketplace continues to evolve and become more complex. Some consumers are clearly being driven by the economy to make choices on the media devices they purchase. Others are expanding their equipment to add more audio/video devices to their home. Still others may be deferring a TV purchase or replacing their TV with a computer."

Email: Georg.Szalai@thr.com

Twitter: @georgszalai