Surprise! Netflix Users Like TV

TiVo Research and Analytics, a unit of the DVR maker, yesterday released a useful reality check on the impact of over-the-top video usage on traditional TV viewing. Bottom line: it doesn’t have much of an impact.

TRA surveyed nearly 10,000 TiVo subscribers about their use of Netflix and other OTT services, and than correlated their responses against data on their traditional TV captured from their TiVo STB. The key findings as reported by TiVo:

  • Netflix does not appear to cannibalize traditional TV: There was no significant difference in the amount of traditional TV viewing between the self-reported Netflix and non-Netflix households, nor did either group differ from the overall TV viewing population.
  • Of the survey respondents 57% stated that they subscribe to Netflix and 18% had watched “House of Cards.” 50% also reported they subscribe to Amazon Prime and 18% to Hulu Plus. 8% subscribe to all three over the top services.
  • Netflix households also are heavier viewers of other premium dramas:
    • Households who reported viewing “House of Cards” watched 85% more HBO than non-Netflix households.
    • “House of Cards” households watched Showtime’s “Homeland” 125% more than those who don’t use Netflix.
    • Netflix households viewed Showtime’s “Homeland” 26% more than those who don’t use Netflix.

TRA CEO Mark Liberman said, “Our data show that Netflix is not currently a substitute for traditional television, but offers a way for TV lovers to watch more of the kinds of programs they love. The future of television may tell a different story, but as of today we’ve found that the Netflix subscribers in our study are not watching less traditional TV.”

So much for OTT-driven cord-cutting? I wouldn’t go that far based on a single study, but the findings are consistent with historical patterns in media consumption. Generally speaking, the most voracious media consumers tend to be heavy users of all delivery channels and formats.

I remember doing consumer research nearly 20 years ago on the relationship between video rental behavior and purchases of movies on VHS and DVD. What the research found, contrary to conventional wisdom at the time, was that, while rentals might displace some potential sales for particular titles, consumers could not be neatly classified as “renters” or “buyers.” Generally, high rental frequently was highly correlated with frequent purchase behavior and vice versa. In other words, the more you rented, the more you bought, and the more you bought, the more you rented.

The converse also held: the less you rented the less you bought, and vice versa.

It should be no surprise, then, that self-reported Netflix users also watch a lot of regular TV, and have a higher incidence of Amazon Prime and Hulu Plus usage. They are the most voracious consumers of TV content and, true to type, tend to be heavy users of all delivery channels and formats. That doesn’t mean that one channel can never cannibalize another. But when it does it’s more likely to be an aggregate effect than something you can pin on individual users.