US Netflix subscribers’ total streaming hours have almost tripled from 1.8 billion in Q4 2011 to 5.1 billion in Q2 2014, reports The Diffusion Group (TDG), and per-subscriber streaming internationally has increased from 28.3 to an estimated 46.6 hours per month. But while the typical Netflix user might be streaming for one-and-a-half hours per day, American users surveyed by GfK say their consumption of regular TV is unaffected.
The extent to which OTT services (with Netflix the most popular) impact linear TV viewing is an important consideration in the evolution of TV. In a recent deep dive into TV viewing trends, MarketingCharts found that traditional TV consumption has been declining among younger age groups (the most apt to be using OTT services), but remains strong relative to other video viewing sources. As further outlined in the Debrief, online video appears – for the time being – to be largely complementing rather than replacing traditional TV. Of course, the one-and-a-half hour per day streaming estimate released by TDG strongly supports the idea that some cannibalization is occurring.
Ask Netflix users themselves, though, and the answer is different. The GfK survey questioned Netflix users aged 13-54 about how their streaming affects their typical viewing of an assortment of programs using their regular TV service (whether broadcast, cable, satellite, or other). Interestingly, while a solid majority said that it makes no difference to their viewing of new episodes of dramas (58%) and comedies or sitcoms (65%) on broadcast or cable TV networks, respondents were actually slightly more likely to say that it has made them watch more rather than less of these types of programs.
Indeed there appears to be a net positive effect (albeit slight) on viewing of each type of programming:
- Reruns of episodes of comedies or sitcoms on broadcast or cable TV networks (28% watching more versus 22% watching less);
- Reruns of episodes of dramas on broadcast or cable TV networks (27% more; 25% less);
- Theatrical movies (those originally shown in theaters) shown on broadcast or cable TV networks (26% more; 19% less);
- New episodes of dramas on broadcast or cable TV networks (24% more; 18% less);
- Original movies shown on broadcast or cable TV networks (22% more; 21% less); and
- New episodes of comedies or sitcoms on broadcast or cable TV networks (19% more; 16% less).
GfK has fielded similar surveys in the past: in late 2012, Netflix users said regular TV content consumption was unaffected; last year, they reported that their Netflix viewing did affect their time spent with premium cable channels. That suggests that Netflix is acting more as a premium channel than a replacement for regular broadcast and cable TV services – although this may change in time as Netflix licenses more content and continues to produce popular programming of its own. (Content is king!)
Some 55% of broadband households now subscribe to an OTT service, per new figures from Parks Associates. A recent forecast [pdf] from Digital TV Research predicts that Netflix will surpass 100 million global subscribers by 2020, while a separate forecast covering 51 countries expects OTT revenues to grow from $4 billion in 2010 to $42.3 billion in 2020, with the US hanging on to its position as the leading market at the end of the forecast period (37% share).
About the Data: The GfK data concerning Netflix’s impact on regular TV viewing is based off a survey of 355 Netflix monthly users.