Subscription Video-on-Demand (SVOD) services have grown in popularity over the past several years. In fact, research claims that SVOD is actually overtaking traditional TV because it gives viewers the flexibility of when and where they can watch their favorite shows. However, for TV networks, this trend may appear somewhat alarming. Is the growth in SVOD taking live viewers away from the TV? Let’s take a look at the numbers shall we?
Data from Nielsen shows an across-the-board increase in multimedia device (TV-connected device) usage between Q4 2014 and Q4 2015. 12-17 year-old viewers are watching video on their devices 36 minutes more a week, and 18-24 year-olds are watching 25 minutes more a week. Plus SVOD services like Netflix are still steadily attracting new subscribers; Netflix gained nearly 6 million subscribers to reach 45 million between Q4 2014 and Q4 2015.
Nielsen also shows that in every age group below 50 live TV viewing is down. In some groups the decline is even more extreme. Among 12-17 year-olds, viewing declined 2 hours and 30 minutes a week between Q4 2014 and Q4 2015, and 18-24 year-olds watched 1 hour and 40 minutes less a week over the same period.
And show ratings have also faltered. According to Nielsen’s live-plus-same-day ratings, in 2015 just three of the top 25 cable TV networks saw growth in prime-time ratings. This prompted many in the TV industry to immediately blame “big name” SVOD services. Some TV execs even urged their fellow TV leaders to withhold content from SVOD services for as long as four years after broadcast.
It’s important, however, to point out that poor counting methods may in fact be the culprit behind these exaggerations in declines. And perhaps everyone’s simply overlooking the benefits SVOD continues to bring to the TV-viewing experience. For example, Nielsen’s live-plus-same-day rating misses a great deal of the audience that watches on demand using TV platforms like DVR and VOD. These viewers are still technically watching live TV, just on demand, but yet we are not able to correctly track them.
And just because online consumption has gone up 55 minutes, doesn’t mean TV viewing has gone down the same amount. The total amount of time spent with online video, including TV, has increased over the same period, from 4 hours and 56 minutes in 2011 to 5 hours and 31 minutes in 2015.
The truth is that viewers are substituting online video for some live TV time. However, we can’t wrongly conclude that the increase in online viewing accrues to only SVOD. There are, after all, other TV Everywhere services. Freewheel reports that TV Everywhere viewing of long-form and live content accounted for 65 percent of online monetization in the 4th quarter of 2015. And unfairly none of these ad views are counted in Nielsen’s viewing numbers!Is SVOD truly at fault for a drop in live TV viewing? The simple fact is that, in the majority of American homes, traditional TV viewing remains the primary entertainment source. And in many of those homes SVOD continues to help viewers catch up on current shows they otherwise would have missed.