Technology

Netflix, Inc. Responsible For Half Of U.S. TV Viewing Drop

Netflix is growing popular worldwide, and though it isn’t harming the entertainment industry, it is seriously killing traditional television viewing. A new study by Michael Nathanson of MoffettNathanson indicates that the streaming firm is responsible for about half of the overall 3% drop in TV viewing time among U.S. audiences in 2015.

Netflix, Inc. Responsible For Half Of U.S. TV Viewing Drop

Is Netflix slowly killing TV?

Nathanson’s finding is based on the estimate that Netflix’s domestic subs streamed 29 billion hours of video in 2015 or 6% of the total American live-plus-7 TV viewing as reported by Nielsen. Netflix’s total streaming hours as a percentage of TV viewing will continue to increase to about 14% by 2020, predicts Nathanson.

“Currently, Netflix is a source of industry pain, but not necessarily a cause of industry death,” the analyst stated.

Netflix’s viewing was not as big as that of the seven biggest conglomerates (NBCUniversal, Disney, Viacom, Time Warner, 21st Century Fox, Discovery and CBS), but it was more than smaller cable programmers like A+E and AMC. The streaming firm reported 74.76 million streaming customers worldwide by the end of 2015, including 44.74 million in the U.S.

Some TV networks safe from Netflix

Executives at media conglomerates see the streaming giant as a growing threat. Last fall, Time Warner CEO Jeff Bewkes compared the streaming firm to the “Albanian army” and more recently said the company may stop licensing TV content to SVOD services.

However, Nathanson noted that some TV networks are safe from the rising popularity of streaming video services in the U.S. The TV ratings of networks from Time Warner, Scripps Networks Interactive, AMC Networks and Discovery Communications climbed in 2015. The networks that sustained a decline were A+E Networks (viewing dropped 15%), Viacom (fell 13%), and NBCUniversal and Disney (dropped 5%).

According to Nathanson, CBS viewing among Netflix subs was 42% lower than non-subs, Fox was down 35%, ABC was down 32%, and NBC fell 27%. In contrast, the viewing of Disney’s networks increased 11% in Netflix homes vs. non-Netflix homes. For Viacom, there was a 5% year over year drop in Netflix homes.

Referring to such uneven results, Nathanson says, “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.”