Home » Disruptive Innovation » Netflix Caused 50% of U.S. TV Viewing Drop in 2015

Netflix Caused 50% of U.S. TV Viewing Drop in 2015

5 March 2016

From Variety:

Netflix is leaving an indelible mark on the TV biz — and while the streaming giant isn’t dealing a fatal blow to the industry, it is seriously cutting into traditional television ratings.

In 2015, Netflix accounted for about half of the overall 3% decline in TV viewing time among U.S. audiences, according to a new study by Michael Nathanson of MoffettNathanson. The analyst calculated that based on an estimate that Netflix’s domestic subs streamed 29 billion hours of video last year (Netflix said members worldwide watched 42.5 billion hours in 2015). That would represent 6% of total American live-plus-7 TV viewing reported by Nielsen (up from 4.4% in 2014).

Moreover, Nathanson predicts Netflix’s total streaming hours as a percentage of TV viewing will continue to rise to about 14% by 2020. “Currently, Netflix is a source of industry pain, but not necessarily a cause of industry death,” he wrote in the note.

. . . .

In comparing TV viewing of Netflix vs. non-Netflix households, broadcast networks took the biggest hit in 2015. CBS viewing among Netflix subs was 42% lower than non-subs, with Fox at -35%, ABC at -32% and NBC at -27%, according to Nathanson’s analysis.

. . . .

Other studies have compared Netflix’s viewing to traditional TV. The service was on track to attract a larger 24-hour audience than each of the major broadcast networks (ABC, CBS, Fox and NBC) some time in 2016, per an analysis last summer by FBR Capital Markets.

Link to the rest at Variety and thanks to C. for the tip.

Disruptive Innovation

21 Comments to “Netflix Caused 50% of U.S. TV Viewing Drop in 2015”

  1. Now now, credit where credit is due …

    While some have gone to Netflix for the better shows, many have also fled ‘TV’ for the over twenty minutes of loud in your face advertising.

    My mom watches Netflix for the shows, my 200 CD changer plays because I grew tired of all the LONG LOUD AD BREAKS …

    Netflix isn’t killing TV, TV’s spongers/sponsors are …

    • “Netflix isn’t killing TV, TV’s spongers/sponsors are …”

      I second that. Double volume commercials and reality shows are why we made the decision to stop watching “regular” TV in 2006.

      It’s nice being able to watch what I want, when I want, on Netflix or Amazon without commercials or having to be in front of the TV at a certain time every week.

    • I agree, but they’re making logical responses to the decline in viewership that started with the expansion of cable and the rise in console gaming.

      Businesses need a steady stream of money to maintain itself. A decline in revenue means they have to come up with solutions. Hence, stunt events like live shows, cramming more ads while charging sponsors the same amount (inflation), and so on.

      It drives me insane, so I respond by not watching.

      This is why another logical response by companies is to restrict competition through lawmakers, which is why you have to register with the state to be a barber or beautician.

      • “It drives me insane, so I respond by not watching.”

        Which they just don’t get. Like trad-pub overpricing ebooks, you get fewer and fewer buys until you hit that magic point and it drops to nothing worth counting.

        • Precisely. Aside from the local news, the only network TV show anyone in the family watches is Grimm.

          • And even on the local news, whose target market I must fall into, I have to get up and stop watching 8-10 times per half hour when they try (again) to pitch me pills, insurance, and financial planning services. Yeah, I’m over 60, but all these drugs? Really? Do the marketing genii think I’m interested in nothing else?

  2. P.G.

    I was taken out to a Superbowl party at the house of friends. I was gracious, of course, at the time and I was keen to experience the whole thing for two reasons.

    I’d never seen the, (to me) peculiar phenomenon of Cheerleaders and secondly, I’d never seen the Superbowl.

    Frankly, while I enjoyed all the hoopla, food and obvious energy in the house, the stuff coming off screen left me decidedly underwhelmed.

    I didn’t understand a single advert. My concentration on the tussle on pitch was constantly interrupted by some nonsense with vinyl animals and CCG. If you want to know why there’s an epidemic of ADHD, I’d say looking at the advertising crap would be a good place to start.

    That folks pay good money for a monthly sub to watch sports channels only to be drowned out by idiotic adverts astonishes me.

    I still haven’t seen cheerleaders, (sigh.)

    brendan

    • Here you go, Brendan.

      • Antares,

        LOL….well, they look pretty darn healthy and definitely athletic. Yeah, interesting.

        Thank you, much appreciated. I never though to check YouTube, (Duh.)

        Thanks.

        brendan

        • They always choose the healthiest women to be cheerleaders, Brendan.

        • A high school classmate was one of the first Dallas Cowboy Cheerleaders of the glamour era. I saw Pam years after she left the DCC, and she was still drop-dead gorgeous. I mean, she was pretty in high school, but Hollywood superstar beautiful the last time I saw her.

  3. And YouTube isn’t responsible for some of the decline?

    TV means viewing by someone else’s schedule. Netflix and YouTube mean viewing by my schedule.

    • The article says Netflix is responsible for half of a 3% drop (so 1.5% I suppose). Nothing was said about the remaining 1.5%, which may indeed include YouTube.

    • Antares/Group,

      If you have Netflix, there’s a film I’d highly recommend.

      I really don’t like Hollywood War movies, they all follow a certain path.

      Restrepo, a film by Tim Hetherington and Sebastian Junger is a small movie made for real by a couple of journos/directors who were embedded with the soldiers of 2nd Company on the most dangerous assignment in Afghanistan for 16 months solid.

      It is a real warts and all movie, which tells the absolute truth and I felt my heart go out to those ordinary young soldiers, being made into heroes by the rotten circumstances of the day.

      It’s on Netflix. “Restrepo.” Go watch.

      brendan

  4. NDS! It’s all Netflix’s fault! 🙂

    • Felix J. Torres

      Well, Netflix started it.
      And, besides:
      1- Hulu is co-owned by Fox, Disney, and Universal
      2- Amazon sells current season episodes which, like Hulu, count towards ratings (albeit at a discount)
      3- Netflix only runs older network fare so any eyeballs defecting to Netflix are a total loss to their ad-pimping stats

      Of course, Netflix pays good money to stream those TV shows and the networks aren’t about to give that money up just yet so any NDS is going to be mild. 😉

  5. Watch everything from the DVR. Then click through the commercials in 5 seconds. Watch what you want when you want. It doesn’t matter if there are lots of shows I don’t like. I don’t care. I don’t bother with them. Doesn’t matter if there are commercials. Skip them.

  6. My immediate reaction (as an early cable-cutter) is “Netflix has nothing to do with it.”

    The trend ultimately goes back to VCRs and the ability to choose what you want to watch. But you can’t blame even that. IMHO, the one to blame is Comcast, who organized and drives the cable cartel.

    That tight control of access, and the insistence on bundling, etc, has led to what we have now: 200 channels of fake “competition” reality TV, 24/7.

    I’ll use as an example the Food Channel. Once upon a time it was actually about food. The only “reality” show was Iron Chef Japanese — and even that was not about the competition and personalities, it was about the food. The “personalities” of the chefs was in their use of food. (I love Alton Brown, but I HATE HATE HATE all of the shows he does now.)

    Luckily YouTube has completely surpassed the Food Channel in every area of programming. Watch the channels “Strictly Dumpling” or “Migrationology” or even “Cooking with Dog.”

    And this is true for pretty much every other area of television. Sports and live events are pretty much the last bastion of the cartel. (And I have hopes for Apple to do a little disruption on that one….)

    I don’t care about commercials (not when they stick to less than 2 minutes an ad break like they used to on broadcast) but I can’t abide bad programming.

    (And btw, I don’t have Netflix. If I ever subscribe, it will be to their DVD service, because their streaming choices suck.)

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