×
You will be redirected back to your article in seconds

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

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.

Executives at media conglomerates are now viewing Netflix as a growing threat. Time Warner CEO Jeff Bewkes, who once compared Netflix to the “Albanian army,” last fall said that the company may pull back on licensing TV content to SVOD services.

But not all TV networks are suffering from the rise of Netflix and other streaming-video services, Nathanson noted. Total viewing of networks from Time Warner, Scripps Networks Interactive, AMC Networks and Discovery Communications rose in 2015. A+E Networks’ viewing hours declined 15%, Viacom fell 13%, and NBCUniversal and Disney each dropped 5% overall.

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.

Meanwhile, viewing time of Disney’s networks last year was 11% higher in Netflix homes versus non-Netflix homes. Viacom saw a “modest” 5% year-over-year drop in Netflix homes; in that case, “it is unclear if this is as a result of viewership which has already been negatively impacted by SVOD services in prior years, or if the company’s younger-skewing viewers are switching back and forth more easily to watch both linear television and SVOD services,” Nathanson wrote.

Based on viewing time, Netflix in 2015 was bigger than smaller cable programmers like A+E and AMC, but not as large as the seven biggest conglomerates (NBCUniversal, Disney, Viacom, Time Warner, 21st Century Fox, Discovery and CBS).

One caveat on the analysis: Nielsen’s Live+7 excludes online and mobile viewing on TV networks’ sites and apps. But Nielsen hours-viewed numbers adjust for co-viewing, whereas Netflix’s reported data is per household. According to Nathanson, that means Netflix per-person viewing is underrepresented relative to Nielsen Live+7; thus, the analyst assumes the two factors largely cancel each other out.

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.

As of the end of 2015, Netflix reported 74.76 million streaming customers worldwide, including 44.74 million in the U.S.

One big challenge for Netflix now will be increasing its reach among older consumers, according to Nathanson, an age group that watches more traditional TV than younger demos. SVOD penetration among those 35-44 is 60%, then tapers off to 54% for the 45-54 cohort, 37% for 55-64 and 23% for those 65-plus.

Nathanson’s note Thursday, “Is Netflix Killing TV?,” is an update to one the analyst published last April.

More Digital

  • Jingle Punks Jingle Player

    Jingle Punks at 10: How the Production Music Platform's Player Works

    Though its primary function is creative, Jingle Punks is built on a foundation of technology and administration. The patented Jingle Player that lets customers search for music using pop culture terms is both intuitive and efficient. Typing in “Reservoir Dogs” or “Starbucks” generates suggestions. Queries are monitored “so if there isn’t an exact match, we’ll suggest [...]

  • Jill Goldfarb - Jukin Media

    Jukin Hires TV Veteran Jill Goldfarb as VP of Linear Programming

    Jukin Media, which specializes in licensing user-generated viral videos, hired Jill Goldfarb as VP of linear programming. Goldfarb’s former tours of duty include serving as Discovery Channel’s VP of programming and as VP of program planning and scheduling at ABC Family/Fox Family Channel. Most recently, for the past five years she worked as an independent [...]

  • Imax Is Exiting the VR Space,

    Imax Is Shutting Down Its VR Business, Closing Remaining Three VR Centers in Q1

    Imax is making its exit from virtual reality (VR) official: The company notified shareholders with a SEC filing Thursday that it will close down its remaining three VR centers, and write off “certain VR content investments.” A company spokesperson confirmed the planned closures and shared the following statement with Variety: “With the launch of the [...]

  • Apple Music Connect Is Being Discontinued

    Apple Music Phases Out Connect Social Feed

    Apple Music has notified artists that it will be phasing out its Connect social feed. Artists won’t be able to post to Connect anymore effective immediately, and their existing posts will be removed by next May, according to an email sent to artists that was first published by 9to5Mac Thursday. “Today we’re streamlining music discovery [...]

  • YouTube logo

    YouTube Warns Creators They May See Subscriber Count Drops Amid Spam-Account Purge

    YouTube is enacting a broad purge of spam accounts over the next two days, and it’s warning creators they could see a big drop in subscribers as a result. According to YouTube, on Dec. 13-14, creators “may see a noticeable decrease” in subscriber counts. The Google-owned video service regularly works to verify the legitimacy of [...]

  • Ninja to Call 'Thursday Night Football'

    Ninja to Call NFL 'Thursday Night Football' Game on Twitch Free Live-Stream

    Tyler “Ninja” Blevins is Twitch’s most popular live-streaming gamer. Now he’s taking his play-by-play skills to the NFL — although it remains to be seen how many of his millions of followers are actually interested in his commentary on gridiron action. This season, Amazon-owned Twitch has provided free live-streaming feeds of the NFL’s “Thursday Night [...]

  • Amazon Starts Selling Chromecast Again, YouTube

    Amazon Starts Selling Google’s Chromecast Again

    Amazon is once again selling Google’s Chromecast streaming adapter, three years after yanking the product from its website. The e-commerce giant began listing the third-generation model of Google’s Chromecast streaming stick, as well as the 4K-capable Chromecast Ultra, on its website this week. The move could be a first step toward a more comprehensive business [...]

More From Our Brands

Access exclusive content