Commentary

SVODs Now In Majority Of Homes

by Daisy Whitney , Op-Ed Contributor, March 10, 2016

SVOD now has a majority.

Streaming and video-on-demand usage has been growing quickly in the last year, and fresh analysis finds that the penetration of SVOD services has hit more than 50% of households in the United States, according to a just-released report from Pivotal Research.

That takes into account services like Netflix, Amazon Prime and Hulu Plus. The overall figure is a rise from 43% penetration in February of 2015, for a total gain of 17%.

The good news for the TV business is that this increase is not cannibalistic. “Core television viewing trends are down only modestly, and not by much more in homes accessing SVOD services than in those without them,” Pivotal Research says in its report.

In fact, in homes with SVOD services, overall viewing trends are actually a bit stronger from the year-ago period, the report says.

Netflix, not surprisingly, leads the pack of services. Based on its analysis of Nielsen data, Pivotal said that Netflix is now used in 45% of homes (up from 38% a year ago), with Amazon Prime in 21% (up from 15%), and Hulu in 10% (up from 7%). The fact that that all these SVODs \ have grown in the same period underscores the overall consumer interest in these type of services.

Also of note, more than 52% of broadband homes now have at least one TV connected to the Web, and that’s an increase of 6 million homes from 2015, The NPD Group said. The research firm also found that there are now 734 million connected devices in use in U.S. broadband homes, or nearly eight per home.

streaming, svod, video

2 comments about "SVODs Now In Majority Of Homes".

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Douglas Ferguson from College of Charleston, March 10, 2016 at 3:09 p.m.
Sorry, but "down only modestly" is hardly the same as "not cannibalistic" at all, which is the implication of your word choice (like the "much more" qualifier). More accurate would be "not very cannibalistic" (and even more accurate would be "not very cannibalistic yet" with the emphasis on "yet"). These devices that tipped the scale were under the Christmas tree. Give the audience a chance to fall in love with the freedom. It won't kill traditional TV, but I believe it drives in another nail.
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Ed Papazian from Media Dynamics Inc, March 10, 2016 at 4:04 p.m.

Douglas, the rate of viewing time attrition that Nielsen is showing for traditional TV---live plus delayed----is fairly small. You can check out how small by visiting Nielsen's site under "reports" and accessing its quarterly "Total Audience" reports, each of which shows three year trend data. The info is free and available to everyone.

One reason why "linear TV" viewing--in terms of time spent, not average channel ratings----isn't plummeting is the fact that much of its fare---news, sports, talk, games, reality, documentaries, etc. isn't available in quantity on SVOD nor is it likely that if it were that SVOD's version would be incredibly superior to what's already out there. So far, SVOD is competing with the broadacst networks, stations and basic cable channels mainly in the movie and primetime sitcom/drama categories. That's where the viewing declines are being felt. However, primetime represents only a third of a typical person's total consumption---I'm referring to the total pop not just the 18-34s. The remainder is not really being challenged by SVOD in a big way. Advertisers spend about 50% of their TV dollars in non-prime dayparts. Therefore, taken in its totality, there isn't a big problem, as yet.

What we have found and reported on in "TV Dimensions 2016" is that in primetime, it's the broadcast TV networks that are taking the greatest hit in terms of rating declines, mainly among the 18-49-year-old audience. But the broadcast networks account for only 30% of primetime audience delivery and primetime, itself, amounts to only a third, or so, of total viewing. Accordingly, only one tenth of all viewing---broadcast network prime--- is being seriously challenged by SVOD, which is why it's negative impact on total ad dollars allocated to the TV networks, syndicators and basic cable, so up to now, has been negligable. Whether this will change remains to be seen, but short term---- say the next three years----I agree with Brian Weiser that it's probably not a problem.