Netflix responsible for half of lost TV ratings

2016-03-04 11:23

Cape Town – New research in America reveals that Netflix has been responsible for half of the lost ratings and viewers who completely disappeared in 2015.

America’s TV industry is in crisis, with plunging viewership that is more a case of ratings measurement agencies like Nielsen that’s unable to adequately measure online and streaming services like Netflix.

Although more people in the United States and globally are watching television, Nielsen and others report steadily dropping ratings for linear TV channels. Netflix, that is now also available in South Africa since the beginning of this year, notoriously doesn’t release ratings.

That creates the effect where existing TV viewers and viewership seems to "disappear", since they’re not effectively being measured when they watch on other devices and other services.

While not yet an issue for South Africa, the slowly growing penetration of local video-on-demand (VOD) services like Naspers’ ShowMax, China’s PCCW Global’s, MTN’s VU and Netflix South Africa are going to have the same impact on the locally reported linear television ratings of traditional broadcasters and operators like the SABC, MultiChoice’s DStv, and StarTimes Media SA’s StarSat.

Just like Netflix in America, in South Africa none of the existing subscription video-on-demand (SVOD) operators release ratings or viewership information either, although when people are watching these services, they are watching television and spending time consuming media that’s not effectively being measured.

According to a new study by Michael Nathanson of the research firm MoffettNathanson, Netflix accounted for a whopping 50% of the decline in traditional TV time in America in 2015.

That means that Netflix has become the same as a small to medium-size TV group. Netflix’s total viewing hours – 29.1 billion – is now greater than pay-TV groups like A+E Networks, Scripps Networks Interactive, AMC Networks and Univision.

"We calculate that, in an imperfect analog, Netflix sourced [caused] 50% of the decline in measured linear viewing in 2015," says Nathanson.

"Currently Netflix is a source of industry pain, but not necessarily a cause of industry death," writes Nathanson.

According to other research, FBR Capital Markets predict that Netflix is on its way to attract a larger 24-hour TV audience later this year than the traditional American broadcasters, NBC, ABC, CBS and Fox.


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