Thanks, Netflix

Cable TV viewing declined by more than 12 percent in January

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Looks like Netflix and other streaming services are starting to have an impact on traditional TV viewing: Total live TV ratings were down 12.7 percent year over year across the networks of major media companies, according to a note from Nomura Research, which is based on recent numbers from Nielsen. Nomura analyst Anthony DiClemente wrote that this was “one of the worst declines we have seen since we launched coverage of these companies.”

So why is live TV struggling? DiClemente pointed the finger at streaming services as the reason for the decline: “Netflix, Amazon Instant Video, and Hulu, continue to siphon viewers away from linear TV,” he concluded.

There are some differences between individual networks, which in turn weigh on media companies’ bottom lines. January was a particularly bad month for Viacom, which saw ratings decline by 23 percent when compared to January 2014, with declines largely driven by MTV and Nickelodeon. Disney on the other hand only faced ratings declines of 7.5 percent, thanks in part to great ratings for ESPN.

Numbers like these run counter to the notion that online video viewing is additive to traditional TV consumption. That may have been true when people only streamed 15 minutes a day, but recent numbers from Netflix show that its subscribers watch an average of 90 minutes of Netflix programming every day.

13 Responses to “Cable TV viewing declined by more than 12 percent in January”

  1. Love all the comments, so true so true! I’m planning to pull the DTV plug next week, as I can’t stand to even surf past the dozens of crap reality shows they’ve foisted upon us. Why can’t we customize which channels we receive from our satellite or cable providers? Ridiculous they have not adapted.

  2. nerdrage

    It’s been obvious for a while that broadcast is doomed (ad revenues way down) and cable will follow but nobody ever believes it until it happens. Considering what a massively better deal Netflix is vs cable ($8/month for streaming, $16 if you add DVDs, which covers just about anything you’d want to watch), this transition is inevitable.

  3. WalterInWinnipeg

    The blame for low TV viewership lies with TV stations and networks:
    1. The ultra-cheap programming they produce.
    2. The mega rate of repeating shows, sometime episodes over 6 times in 24 months.
    3. They don’t even try to attract a large demographic. They ignore adults over 23 in choosing programming and largely ignore males (except for the couple of sports timeslots).
    4. The total and complete lack of imagination and risk-taking regarding programming. They stick us with the same few scenarios over and over and over again, the same characters over and over again. Police procedurals, at home mothers, and fake reality TV.

    • I echo that. Outside of some sports, news or event programming (and a wee bit of late-night TV – recorded of course), I only watch maybe 1 or 2 programs on the main channels now. Everything else is Netflix (mostly back material), or HBO.

  4. thedude213

    People leaving for netflix, hulu and the like is a side effect of being fed up with an uncompetitive market, bundled price fixing, unoriginal content, and assembly line reality TV. Why sit through a never ending marathon of pawnstars when I can pay a fraction of the cost for cable and watch well written content on my time, or get the rest of my channels free over the air? Cable companies are desperate to preserve their archaic business model, don’t blame Netflix and Hulu for stealing customers, blame Cable Companies for their piss poor business practices.

  5. Keith Hawn

    Weird that you’d link to Nomura giving the impression we’d see the report (instead we get Nomura’s homepage…duh). Weird that Nomura would use Nielsen data – why isn’t Nielsen reporting this? Weird that you didn’t define “live TV” – is that really live, or C+3, or C+7?

  6. Makes you wonder how Netflix would do if it offered a free option that included commercials. One thing is for sure, if declines like that keep up it won’t be long before advertising dollars also start to migrate quicker too. The question is – where will they go?

    • nerdrage

      Both Netflix and Amazon could benefit from having a parallel service that is free and ad supported, but for Netflix even having a parallel service might cheapen the brand while Amazon’s main business is still selling stuff – their streaming is a loss leader for their main business, to attract customers to Prime – so free/ad-supported really makes sense for them.

  7. Jim Jackson

    Net Neutrality is more important than ever. Without that cable co’s will cap OTT to death while allowing their own IP on demand with no usage counted towards a cap.