Nielsen began tracking radio audiences in the 1930s using a small electronic device called an Audimeter (a.k.a, "the little black box") that was attached to the radio sets (and later televisions) of sample households nationwide. The device measured whether the set was turned on and which channel was tuned in to some 1200 participating homes.

The listening/viewing preference information was fed through special phone lines to the Nielsen computer which record and tabulate the minute-to-minute viewing habits of these sample American families and then distributes the information to the wire services, advertisers, and other parties interested in the television industry. Currently, each point on this survey represents 109,600,000 households.

A.C. Nielsen first began compiling national TV ratings in 1950 using paper diaries. In 1980, Nielsen expanded its measurement to include Home Video Index which monitored cable and home videos for some 17.2 million households.

Nielsen People Meter

As of September 1, 1987, the traditional Audimeter was replaced by a more complex unit called a "People Meter" which determined additional viewing factors such as sex and age. As of 1996, the People Meter monitored 5000 households nationwide. To operate the People Meter, a button must be punched before viewing - with separate buttons for parents, children and even visitors.

In 2005, Nielsen introduced the Active/Passive Meters (AP) which captures the audience information in digital, analog and combined viewing environments.

The A.C. Nielsen Service was founded in 1923 by Arthur C. Nielsen, Sr. (died in 1980). It is located at 1290 Avenue of the Americas in New York, NY 10104. See also - "Arbitron Rating Services"