Commentary

Good News, Bad News For TV, Video And Advertisers

Whenever Nielsen releases its latest quarterly Total Audience Report, we see a lot of quick headlines quoting top-line data. But a more in-depth analysis reveals important insights into what’s really going on.  

I’ve looked over all the quarterly reports during the past three years, and here are some highlights.

Good News for Traditional TV – Adults spend more than five times as much time watching traditional TV than watching video on all other screens combined. Those under 25 spend about twice as much time with traditional TV than with other screens.

Bad News For Traditional TV – Two years ago, adults spent 10 times as much time, while those under 25 spent four times as much time with traditional TV. The gap between traditional TV and video on all other screens has been cut in half over the past two years — and continues to narrowing dramatically. This is also the first time I can recall when traditional TV viewing was lower in the first quarter than the fourth quarter of the same season.

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Good News For Netflix, Hulu, Amazon Prime – The amount of time people spend with multimedia devices has increased every quarter since Nielsen began measuring them, more than doubling among virtually every demo over the past two years (as U.S. household penetration grew from 22% to 31%).

The monthly reach of multimedia devices among total adults has also doubled over the past two years, going from 19% in the first quarter 2015 to 38% in first quarter 2017. During the same period, the percentage of homes with subscription video rose from 42% to 57%. (That surpasses DVR penetration, which stands at 54%.)

Good News For Mobile Video – Video viewing on smartphones has been steadily growing. While only ranging from a half hour to an hour and a half per week, depending on the demo, it now reaches roughly 80% of viewers per month across all adult age groups under 65.  The number of active Netflix mobile viewers has reportedly increased by 20% over last year (approaching 70 million), and Netflix has also been the No. 1 app, based on combined U.S. revenue across Apple’s App Store and Google Play in the second quarter.

Bad News For TV Advertisers – DVR and time-shifted viewing remains solid, particularly among traditional TV’s main audience —viewers 35+.  But live viewing, which is the only way advertisers can know who is exposed to their commercials, is declining sharply, particularly among younger viewers. Over the past two years, live viewing has declined by 20% among adults 18-24, 14% among adults 25-34, and 8% among adults 35-49.  Among adults 50-64, live viewing is down just 2%, while it’s flat among adults 65+.

So, what does all this mean?  Well, people still like watching video content on a television set, and traditional TV is still by far the most-viewed screen among all age groups. But traditional TV’s lead over other screens is rapidly narrowing, particularly among younger viewers.  

On the other hand, total video viewing across all screens continues to rise. Content is still king.  Research and audience measurements need to be increasingly nimble to keep up.  Commercial audience measurement is still basically nowhere — not a good sign as commercial avoidance is increasingly easier.

1 comment about "Good News, Bad News For TV, Video And Advertisers".
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  1. Ed Papazian from Media Dynamics, July 25, 2017 at 9:08 a.m.

    All very interesting, Steve, but comparing everything on a relative basis----like share of time with types of screens----may be a bit misleading. For example, your typical 18-24-year-old is a very light TV viewer to begin with and is out viewed by older adults by a huge margin, especially by those over the age of 50. If the TV networks and many cable channels were really depending on 18-24s as much as they do on older and far more numerous adults to sell advertising, they would have been out of business long ago. Also, it is well established fact that as people age their TV viewing increases, so the real issue is what will be the impact of increased digital video viewing not only on the amount of 'linear TV"viewing people consume, but also on how advertisers allocate their TV/video media spending.

    Of course, there will be a continued audience tonnage downward spiral for "linear TV" but hardly the massive swan dive that the digital folks were predicting---and praying for. Also, while digital video uasge will grow, if most of this consumption takes place on mobile, not desktop PCs, that, in itself, limits the amount of time that will be spent due to the much shorter attention spans of mobile users as well as the  smaller screens and where the activity  ocurrs----often away from home where there are many distractions. The contention that only 5-second commercials "work" on mobile is another limitation for many branding advertisers.

    Finally, the move by the broadcast TV networks, their station partners and owned cable channels into the digital viewing arena via Hulu, and YouTube, is spurring other "skinny bundle" offerings which will generate advertising GRPs via streaming that can replace those lost on "linear TV" as ratings continue to fragment. So as the "eyeballs" move gradually to digital, so are the "linear TV " ad sellers, who may be poised to provide much of the streaming users' content in the near future----we shall see. As you say, "Content is king", and I agree, but for digital to generate suficient volume of viewing, it cant just offer "Game Of Thrones", it must provide, sports, news, and all sorts of more basic stuff that is only available on "linear TV" which people with time on their hands and middle or low brow tastes will consume in massive doses. Who is going to provide such content at scale?

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, EVP, The Sternberg Report