Blog Post

We’ve got hard data: Netflix really is killing Nickelodeon

With kids channel Nickelodeon (s Viab) suddenly experiencing double-digit ratings drops in the fourth quarter last year, a debate began swirling as to whether streaming of the Viacom-owned channel’s shows on Netflix was dispersing its audience.

That discussion has broadened quite a bit in recent months. Last week, for example, The New York Times (s NYT) pondered whether the most recent viewership declines for the Big Four broadcast networks were in part attributable to on-demand viewing through digital platforms including Netflix (s NFLX) and Apple’s iTunes (s AAPL). Conversely, last month, TV analysts wondered whether the record season-premiere numbers for AMC’s long-running series Mad Men were partly the result of new viewers discovering the older seasons of the series on Netflix.

On Thursday, Bernstein Research’s Todd Juenger released some hard data on these pressing issues. Collaborating with his former employer, digital video recorder maker TiVo (s TIVO), Juenger and his Bernstein colleagues found that among homes that regularly stream Netflix programming, viewing of linear kids’ channels — and not just Nickelodeon — took a hit.

“Turns out, Netflix streamers watch just as much traditional TV as non-streamers,” Juenger wrote in his report. “However, there is a significant share shift among streamers. Kids’ networks (not just Nickelodeon) and syndicated shows are getting severely whacked.”

For the study, Bernstein pulled out about 9,500 Netflix streamers and 9,500 non-streamers from a sample of about 35,000 TiVo set-top users.

Analyzing viewership of the two groups over the first quarter, Bernstein found that usage among streamers of Nickeloden’s flagship channel dropped 6 percent from the year-over-year average; viewing also declined a whopping 11 percent for Nick Toons and Teen Nick. For non-streamers, ratings actually grew 2 percent for Nickelodeon, 5 percent for Nick Toons and 26 percent for Teen Nick (a huge 37 percent differential).

Among streamers, ratings increased 11 percent for Disney’s (s DIS) boy-targeted XD channel, but they grew far more — 27 percent — among households that don’t stream. The dynamic was the same for the Time Warner Inc.-owned (s TWX) Cartoon Network, which saw viewership increase by 9 percent among the streaming group but 12 percent among non-streamers.

Conversely, Netflix’s claim that it’s a source of “catch-up” viewing for serialized cable dramas like AMC’s Mad Men, Breaking Bad and The Walking Dead seems to carry some weight, with Bernstein finding that AMC’s ratings grew 86 percent in Q1 for streamers but only 71 percent for non-streamers.

Also positively impacted: the Big Four broadcast networks. Bernstein found that ABC, CBS, Fox and NBC each performed better slightly among households that stream (see chart).

However, Bernstein also discovered that Netflix viewing made consumers much less likely to watch repeats of shows in off-net syndication, with the streaming group declining in off-net viewing by about 19 percent compared to 9.7 percent for non-streamers.

17 Responses to “We’ve got hard data: Netflix really is killing Nickelodeon”

  1. Invaderzimlover

    Maybe if nickelodeon brought back invader zim for new episodes the wouldn’t be sinking so fast with ratings they might even shoot right back up.

  2. Kerry Manderbach

    I wonder if there is also a bit of McLuhan at work here (“the medium is the message”). How is this streaming being done? On computer? Laptop? Tablet? Phone? Maybe the young ones like the “cool factor” of watching programming on an iPad or iPhone instead of a room-specific device (television).

  3. We’re old school and don’t have a DVR, nor cable, nor on demand. We have DVDs, netflix, and a OTA TV. So the first time that the kids were watching PBS and asked to pause the show, I had to do a double take and laugh.

  4. inthedock

    I think the correlation with Netflix content is pretty weak. The data definitely support the idea that traditional kids programming is in decline, but I think another suspect should be considered – YouTube. Maker Studios, and other like-minded YouTube production studios, are growing rapidly and the vast majority of their non-gaming related content plays to Nickelodeons traditional target audience.

  5. my 3 year old has no concept of linear.. he demands to watch certain shows and sometimes specific episodes on any device any time!! scary as a parent!!!

  6. Typical recommendation by people who’ve never had a real job in a real business: pull your content from Netflix. But what if they’re making more from the licensing to Netflix than they would from advertising. And they assume that pulling content from Netflix would lead to a commensurate increase in ratings. How so? Conrad’s point about no-ads and the better user experience of on-demand lead me to think streamers aren’t going to rush to linear again.

  7. deeceefar2

    Keep in mind that this may be a shift in control of the TV. Could it be that parents are relegating kids to iPads and computer viewing, and using the TV for themselves or leaving it off?

  8. Conrad Buck

    Would be good to have data that breaks up the demo of “kids” into age range. However, regardless, the reason kids programs are getting whacked is because kids don’t care about seasons, or episodes or storylines over multi-episodes. Cartoons and other shorts are simply that. From experience, my kids watch everything they want on NetFlix. There’s no ads and they can watch the same episode multiple times. Plus they don’t care if the season or episode is 2 or even 3 years old.

    • Absolutely. My kids have so many shows recorded on our Tivo, but they will watch Netflix more than anything. Netflix just makes it easier for them.

      We bought them the Tangled DVD, but they insisted on watching it on Netflix when they still had it available for streaming. Streaming is just the new way of things.

    • Sean Fitts

      I complete concur. Our older daughter is out of the Nick demo, but our youngest is dead smack in it and she watches almost all of her Nick fare online. She does so for all of the reasons you cite — plus the one mentioned below by deedeefar2, she can watch them when the rest of the family is in the family room and we have no interest in watching some iCarly episode for the umpteenth time.