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We have long asserted that dire predictions about the future of linear TV in the trades have been overblown; it continues to hold its own, despite inroads by alternative viewing sources and cord cutting. Two reports provide additional insights into how this is playing out, as well as perhaps some positive news on how traditional TV sources can evolve along with the changing viewing habits of the American public.
comScore’s State of OTT Report provides a snapshot of OTT viewing in the U.S. Its data comes from the comScore Total Home Panel™, which measures 12,500 homes and 150,000 devices, including their utilization of the 52 OTT services that represent the majority of OTT usage in the U.S. The latest available findings were that 51 million households used OTT in April 2017, with a 54% reach among homes with Wi-Fi. A typical household viewed 49 hours of OTT content over the course of the month.
Compare that with the findings we reported in TV Dimensions 2018, where we estimated that, in 2017, linear TV had a 96% average monthly reach across all dayparts for adults 18+, and of the 120 million U.S. TV homes, 82% still got their programming from cable, satellite or telecom services. Moreover, as reported in Nielsen’s Total Audience Report for the second quarter of 2017, U.S. TV households devoted over 128 hours per month to live plus DVR time-shifted TV.
OTT viewing also displays some familiar patterns. According to comScore’s report, on a daily basis, OTT has the same “primetime” as linear TV, with viewing peaking from 8-11pm. Weekly, OTT peaks on weekends when binge watching is likely to occur. In a sense, people treat OTT sources like Netflix more or less as the would another network, albeit on demand. It’s also worth noting that much of OTT viewing is still of programming that originally aired on networks or cable channels; the research company 7ParkData reported that 80% of Netflix’s streamed content was of this previously-aired content. Although Netflix and other OTT companies are investing substantial sums in original programming, they are a long way from becoming independent of linear TV content. And of course, there’s benefit for linear TV in this; aside from the incomes generated from licensing their content, as OTT viewers “discover” these shows, they often turn back to the original network or cable channel to view the latest or upcoming season, thus boosting the linear source’s ratings.
That’s all well and good for now, but as Millennials—notoriously light linear TV viewers—continue to influence the TV scene, and as households continue to cut the cord due to the ever-rising costs of cable/telecom/satellite access, it’s worth asking how things might change in the long run. Again, it’s not so bad. comScore’s State of OTT Report reported that single person and lower income households are most likely to be “cord cutters” or “cord nevers”; Millennials fall squarely into these categories, both in demographics and in their use of media, as countless reports have documented. And not surprisingly, cord cutters watch more streaming content: while a typical TV household viewed 49 hours of OTT programming monthly, cord nevers viewed 61 hours and cord cutters viewed 81 hours. Significant, but not earth shattering, again considering the content they’re watching still mostly originates from linear TV.
As a final note, comScore looked at another hot topic—skinny bundles—which are increasingly a component of OTT viewing, and seen by some as a threat to linear TV. There are currently only 3.1 million skinny bundle households, but they are more likely to watch streaming content from OTT services, especially Amazon Video and Hulu, which again, offer affordable access to many of the programs they may have lost when moving to skinny bundles. In fact, a recent survey from The Diffusion Group seemed to emphasize this; when respondents were asked to choose five network groups they’d like to see as part of a skinny bundle service, the broadcast TV networks led the pack, with NBCU at 48%, Disney ABC and Fox both at 41%, and CBS at 38%.
It seems clear that people—even Millennials—like broadcast and cable programming; they’re just looking for a more affordable way to access it. Traditional TV sources aren’t really facing extinction; rather, it’s about evolution, as people seek out their content on new platforms. How the networks effectively monetize and exploit this trend to their benefit is the real question.