17 Oct Is the end of Cable TV on the horizon?
The future is now. Americans now watch more on TV from streaming services than by broadcast or cable TV. For the first time in July 2022, streaming platforms, led by Netflix, surpassed cable networks to claim the largest share of the U.S. TV viewing for the month, according to new data from Nielsen. History repeated itself in August and September. It was only a matter of time before a milestone was reached, as streaming usage has continued to climb, while traditional TV declines amid the steady drip-drip-drip of cord-cutting losses.
While streaming gained +0.2 share points in August, coming in at 35% total share, it was flat compared to July’s report. High-profile content within individual streaming platforms drove a number of shifts this month:
- HBO Max recorded a 13.7% increase in viewing volume and a record-high 1.2% share, a lift led by the release of HBO’s “House of the Dragon.”
- Viewings of Netflix’s “Stranger Things” steadily declined in August, leading to a 6.5% drop in usage and a loss of -0.5 share points, bringing the streaming platform to a 7.6% share of TV—only exceeded by Netflix’s shares recorded in June and July 2022.
- Time spent watching YouTube increased 2.8% in August and gained +0.3 share points, tying Netflix’s share for the first time at 7.6% of total TV. YouTube TV viewing, which is included in YouTube’s share of television, increased by 14.9% in August compared to July and represented 11.9% of YouTube usage.
There’s a consistent expectation that streaming services will eventually all be bundled with each other for an overall discount with the end product looking something like traditional pay TV.
Hypothetically, a streaming bundle could include Netflix, Disney+, Hulu, ESPN+, HBO Max, Discovery+, NBCUniversal’s Peacock, and Paramount+ for, say, $50 a month. Creating a facsimile of a larger, multi-company bundle for streaming services is a concept under consideration by several in the industry, including Peacock owner NBCUniversal, according to individuals familiar with the matter.
The traditional pay TV business has been highly profitable for decades for large media companies. Still, with almost three years since the launch of Disney+, which marked the unofficial start of the streaming wars, nothing like a cable-like digital streaming package exists — or is even close to the formation. Competitive imbalances and unanswered strategic questions have prevented it from developing.
Companies must be attentive to the change in how consumers watch television. Only then will they be able to make the necessary adjustments to their advertising campaigns to get the most out of their investments.
SOURCES: NIELSEN, THE GUARDIAN, AND NBC