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.