Tuesday, March 8, 2016, 11:05 AM ET|Posted by Will Richmond
New research from Pivotal Research Group, based on Nielsen data, reveals that at the end of February, 2016, SVOD services were in over 50% of U.S. TV households, up from 43% in February 2015. The SVOD services included are Netflix, Amazon Prime and Hulu.
No surprise, Netflix is by far the most popular SVOD service, in 45% of U.S. homes (up from 38% a year ago), followed by Amazon Prime in 21% of homes (up from 15% a year ago) and then Hulu in 10% of homes (up from 7% a year ago).
However, based on its analysis, Pivotal asserts that TV networks’ viewing is down “only modestly” and that certain networks including CBS and Time Warner’s ad-supported networks have actually experienced growth an increase in viewing in SVOD homes vs. non-SVOD homes.
Pivotal’s analysis found that for the period Oct. ’15 to Feb. ’16, TV viewing in SVOD homes was worse by 1.5% vs. non-SVOD homes, also excluding TV viewing on connected devices. In SVOD households, major TV network groups experiencing a viewership increase from Oct. ’15 to Feb. ’16 included CBS (up 13.2%), Crown (up 7.2%), Time Warner (up 2.8%), AMC (up 1.7%) and Scripps (up 1.4%), while those experiencing a decline included Disney (down 8.7%), NBCU (down 7.5%), Discovery (down 6.4%), Viacom (down 3.7%) and Fox (down 3%).
Pivotal concludes that at the medium level, TV ad spending will not be meaningfully affected by the viewing trends. Instead, there will be shifts in spending among networks based on audience trends. The bigger risk is to affiliate fees, which are seen a vulnerable to skinny bundle adoption. As I’ve written before, I think skinny bundle adoption is actually likely to be relatively small, but we’ll see. Pivotal also notes that a content spending “arms race” will pressure all TV networks’ profitability.
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