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How does Netflix’s growth affect regular TV viewing?

Netflix recently announced that it added an extra 3.2 million viewers in Q3 2016. The news of this growth led to a stream of articles, mainly from Google, once again proclaiming linear TV is on its way out. How does this compare to data from research panels such as BARB and Touchpoints?

Some important facts:

  • Netflix, Amazon and Now TV reach around 6.5m households in total, of which Netflix has 5m.
  • Less than 50% of 16-24 year olds have access to any subscription video on demand (SVOD) service with only one in three children living in a household that subscribes to Netflix.
  • At the end of 2015, TV watched via apps reached 0.9 billion minutes during one week. Linear TV on a TV set reached 95.2 billion minutes in the same week.
  • Linear TV still reaches 98% of the population in a month and 71% in a day
  • The weekly reach of TV has dropped 2.4% in 4 years for 16-34 year olds to 87.7%
  • 86% of TV viewing is still live at the point of broadcast
  • Average viewing on TV has remained stable over the last decade at around 3h 36m a day.

All Response Media Viewpoint

The picture is clear when you view the numbers: TV is still dominant with all audiences. Although younger age groups have shifted slightly towards SVOD, TV still makes up the majority of their viewing. Additionally, for the majority of groups SVOD has complimented TV rather than replaced it.

Netflix is the largest SVOD provider, but still only reaches 24% of homes and growth is slowing. Yet, advertisers should not be complacent as the marketplace is in constant flux. Providers such as VuDu from Walmart are moving into the market with an ad-funded model rather than a subscription-based one. This could change positions further and alter usage. But, it is clear that for the time being, linear TV maintains its prominence in regards to reach and response volumes.