Netflix Viewing Rises, Impacts Trad TV Trends
- by Wayne Friedman , April 23, 2015
Netflix continues to have a major impact on TV viewing -- its viewing hours, in relation to traditional TV viewing, are now double the number of a year ago. There were 10 billion hours streamed for
Netflix against 129.5 billion hours for traditional linear TV viewing in the quarter.
MoffettNathanson Research says Netflix’s comparative size within the traditional TV linear market, in terms of quarterly viewing hours, was just under 6% for the first quarter of 2015 -- 10 billion hours streamed for Netflix against 129.5 billion hours traditional linear TV viewing in the quarter.
Traditional TV linear viewing in the first quarter of 2015 was down 5% versus a year ago, when the Sochi Winter Olympics impacted viewing in the first quarter of 2014. Taking out the Olympics means a slightly better 3.5% decline, according to MoffettNathanson.
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Researchers project that in five years, Netflix total quarterly viewing will represent 11.7% of traditional linear TV viewing. Estimates from MoffettNathanson for quarterly traditional TV viewing say that it will sink to 117.6 billion hours in the first quarter of 2019 from 129.5 billion hours in the first quarter of 2015.
In addition to Netflix, two major factors also contributed to traditional TV viewing decline, the report says. The two other major SVOD (subscription-video-on-demand) players in the marketplace, Amazon and Hulu, represent a third of SVOD subscriptions and unmeasured viewing, including tablet usage.
Netflix has currently some 40 million U.S. subscribers (62 million globally), up 17% over a year ago. MoffettNathanson estimates another 11% gain next year with slower growth rates to follow -- with Netflix reaching 56.2 million by the first quarter of 2019.
Question, Wayne. Did the report say whether the volumetrics referred to for the broadcast networks are for all dayparts combined or just primetime? I assume that the Netflix estimates are for all viewing, regardless of time period. Thanks.
The overall chart was titled: "Netflix consumption as a percentage of total traditional viewing."
The line item of 129.5 billion hours was labelled as Total Linear TV Viewing.
So basically Netfix is having the same impact of a mid-large cable network? Was this quarter the same that saw its popular series come back. Be interested to see it next quarter. Should we assume that "Traditional TV linear viewing" included all national and local broadcast and cable for the entire day?
Well, that the latest Nielsen data shows the time spent watching TV is about 100 times the time spent with all streaming for People 2+ per day. So I guess my followup questions are, what does "Traditional TV Linear Viewing" mean?, what demo were they using, and is the data for TV and Netflix coovering the same period of time? Finally, where did their TV viewing data come from? Without these footnotes, the data has no real relevance. Makes for a noticeable headline, but not much of a story.
We always see these types of studies come out around the upfront. I think we have some responsibitlity to vet them better.
Netflix definitely impacts the Upfronts by pioneering the use of Big Subscriber Data to choose which prgram series will be produced. Reduced the Risk by an Order of Magnitude. The Platform is the important asset. Major Broadcast Networks are still in need of a viable Platform rather making content available on a plethora of "Me-Too" OTT digital platforms and expecting better results than the next digital offering. Major Broadcasters have now enabled and embraced "Audience Fragmentation" which conflicts with their primary mission of "Audience Aggregation".
Whether we are talking CBS, ESPN, HBO or Netflix… it is all “TV” viewing. Some are by subscription, some are ad supported, some are both (and a few good ones are neither). It is irrelevant whether it arrives by satellite, twisted copper pair, co-ax cable, fiber, or over-the-air. The point is that video viewing grows as more choices are made available. Competition within the video medium is healthy – and viewers benefit. “Noticeable headlines” need rational context to help readers keep things in perspective.
Steve, I just did a few very quick calculations, assuming that the average Netflix subscriber did about a hour of Netflix content viewing per day and compared this to what else the Netflix subscriber probably watched---mainly traditional or "linear" TV---- plus what the rest of the population probably watched. If I take all viweing, including cable, local station fare, syndication, Hispanic nets, etc. as well as the broadcast networks in all dayparts as a base, I come up with something pretty close to MN's 6% share figure. Does Nielsen routinely exclude Netflix in its tabulations? Or am I missing something?
If I am catching up on regular TV shows through Netflix (e.g. Big Bang Theory) how is this counted: did I watch Netflix, or CBS? Am I C3, C7, CNetflix? The definitions need redefining!
TV Data is 2+ total day per Nielsen for q1 2015. Netflix number for US is per their announcement of hours streamed in U.S. It was 7.23 million hours for US, not 10 million. 10 million includes international.
These seem right to me. A couple years ago Netflix was 3%. Projections assume no change in how Nielsen measures viewing. That will begin to change if they include out of home, tablets etc.
6% share would be at least as big a a big cable network, maybe more, no?
@Jack, if Netflix is capturing 6% of all viewing across all dayparts, that's the equivilant of more viewing than any one of the major broadcast TV networks attains. I've done this kind of analysis for years for "TV Dimensions"; when you take all programmed hours--day or night---times thier average rating, all three of the original networks---ABC, CBS, and NBC combined---now garner only 14-15% of all time spent. As you know, basic cable now gets over 50%, PBS gets about 3%, local station programming---mainly news and syndicated fare accounts for roughly 14%, the Fox and CW channels draw around 5%, etc. Frankly, I hadn't given Netflix's audience tonnage much thought until now, but that 6% estimate is a stunner.
Ed, the Netflix numbers are for a 24/7 network. Broadcast nets aren't 24/7 unless you are looking at broadcast affiliate numbers. Wall Street analyst Rich Greenfield is pegging it as around as big as ESPN, but that's only a guess.
@Jack, all I've done is tally all of the viewing for all hours programmed by the networks, times their average rating.They are not a presence in the early evening hours between 4-8PM and they don't program in other time slots---noontime on weekdays, late news ( 11-11:30PM ) , etc. But if you take all of their viewing regardless of when it takes place on the same basis as Netflix ( 24/7 ) the latter is generating more total tonnage than any of them. This is not a time slot by time slot comparison. For example a typical major network share in primetime might be 7-8%, which could be larger than Netflix in prime---perhaps ( I don't have their data to check on this ). However, if you take the early evenings---4 hours in the day where the second most viewing takes place, netflix may be attaining 5-7% of the audience while the major networks, who offer program content for only a half our out of the four hours, arent really a factor. I believe that Rich Greenfield may be looking at it on a when programmed basis, not on a total tonnage basis. The two approaches are not going to give you the same answer.
Easy to do a tanker using Nielsen data. Then insert Netflix wherever it would fit. You could use broadcast net total hours or affiliate hours. I alway found it convenient to count hours for network affiliates, not networks when doing this. A couple of years ago, 3% put then in the top 20 nets. 6% has to put them near the top. It makes them a primary source of video entertainment for sure. Why not? They have what might be the biggest and best collection of TV video and movies of any provider.
Ranker, not tanker.