As Foxtel moves to have a foot in both the free to air and subscription TV markets a hint of what could happen with the launch of Netflix in March 2015 has emerged in the US.
According to new Nielsen data viewership of traditional free
to air TV programs have plunged nearly 4%in the last quarter, as consumers move
to online video streaming from the likes of Netflix.
Nielsen claim that online video streaming jumped 60% with
subscribers claiming that the lack of advertising was “a big
attraction” along with better quality content.
While US residents still watched more than 141 hours of live
television a month they also increased streaming of Web video to nearly 11
hours a month, up from nearly 7 a year earlier.
Nielsen said that the amount of online video consumed is likely
to be even higher than the numbers suggest, as they don’t include viewing with
devices configured to watch Netflix such as set top boxes, gaming consoles or
Among viewers between the ages of 18 and 49-a coveted
demographic for advertisers-TV viewing per day declined 3%. People 18 and over
of all ages-including adults over 55-increased consumption of digital video by
more than 50% a day.
The Wall Street Journal said that the report is a major
concern for media executives with Netflix gaining in popularity even as pay TV,
which funds the lion’s share of media companies’ profits, shows early signs of
In Australia major advertisers are already moving away from
TV advertising while manufacturers of devices such as set top boxes, Blu ray
players, TV’s and other devices that can run Netflix are banging down the door
of the US Company in an effort to get Netflix onto their devices ahead of the
launch in Australia in March 2015.
“The uptick of [subscription video-on-demand viewing] means
it’s likely that there will be an impact on traditional TV ratings,” said Steve
Hasker, global president of Nielsen.
Currently Foxtel who are seen as one of the most expensive
pay TV services in the world is looking to buy into the struggling Ten Network.
Netflix Chief Content Officer Ted Sarandos claims that in
the US market demand for free to air TV and streaming TV is still relatively
stable, he claims that what has happened is that the market has grown.
Netflix has chosen not to share viewership data publicly,
arguing that its service isn’t ad-supported and therefore doesn’t require
measurement. But media executives have chafed at the practice, since it cloaks
the performance of their shows on the service relative to others and weakens
their negotiating position against Netflix.
Mr. Sarandos said Nielsen’s move to measure Netflix viewing
is “much ado about nothing.” While media companies may ask for more money if
ratings are high, “there’s no market to support why you’d pay.” Netflix only
has to pay “a dollar more than the next bidder.”