If the TV business is shrinking, how come Nielsen says the TV market is expanding?


You’re looking at the answer. Right here, in front of you.

The TV’s audience has peaked and is contracting. Headlines about pay TV companies losing subscribers and TV ratings in free fall are no longer news.

But Nielsen, the industry’s official measurement company, says there are more homes that can watch TV than ever. It thinks there will be 118.4 million of them in the coming year.

That’s up from 116.4 million last year, and up from 115.6 million in 2013.

Prior to that, though, Nielsen’s estimate of its “TV Universe” had been shrinking, even as the U.S. population was increasing. This understandably alarmed the industry.

So what’s going on? Simple. In 2013, Nielsen changed its definition of a “TV household.” Now it includes anyone with a broadband connection — no cable TV box or rabbit ears required. And broadband is growing.

There’s a clear-cut argument for doing this, since many people are, indeed, watching TV shows over a broadband connection — Hulu alone has 12 million subscribers, and Sling TV has another 800,000 or so.

That doesn’t mean the TV guys can breathe easy, since anyone with a broadband connection is almost certainly doing lots of other things beyond watching TV, which is why both pay TV and TV numbers are down.

But it is a more optimistic way to view the business.

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