*Streaming Services Hammer Cable-TV Ratings
Trade Group Attributes Much of Drop to Competition From Netflix, Hulu
and Amazon
The Cable Advertising Bureau places the blame for its 40% ratings
declines in the third and fourth on the shoulders of subscription online
video services.*
*By Suzanne Vranica And Shalini Ramachandran**
**Wall Street Journal**
**
**March 10, 2015 10:58 p.m. ET*
http://www.wsj.com/articles/streaming-services-hammer-cable-tv-ratings-1426042713
In seeking to figure out why viewership is down across so many cable-TV
networks, ad-sales executives from the industry gathered for a frank
talk last week by the Cabletelevision Advertising Bureau, said people
who attended the session.
The primary reason for the steep fall-off in viewership, the trade group
said: consumers are spending more time watching subscription
streaming-video services like those from Netflix Inc., Hulu and
Amazon.com Inc.
The CAB said it estimates that about 40% of third- and fourth-quarter
TV-ratings declines can be attributed to such subscription video
services, the people said.
Total TV viewing fell about 10% from a year earlier in the third quarter
and about 9% in the fourth quarter, according to an analysis of Nielsen
data by Sanford C. Bernstein.
Bernstein numbers show that the malaise has persisted into the current
period, with total viewing so far in the first quarter down about 12%,
according to a March 9 research note. “We believe the U.S. television
industry is entering a period of prolonged structural decline, caused by
a migration of viewers from ad-supported platforms to non-ad-supported
or less-ad-supported platforms,” wrote Bernstein analyst Todd Juenger.
Rich Greenfield, of BTIG Research, says the average Netflix home is
watching more than 100 minutes of the service a day. There’s “no doubt
overall video consumption is growing,” but subscription video-on-demand
“viewing is eating into TV ratings,” he said.
The Diffusion Group estimates that U.S. consumers streamed 5.64 billion
hours of Netflix in the fourth quarter, a nearly 31% increase from a
year earlier.
Analysts and TV executives say there is no way to determine precisely
how much of the TV-ratings decline was caused by the migration of
viewers to subscription online-video platforms. There isn’t enough data
to draw a causal relationship.
CAB’s analysis was based on an extrapolation of Netflix’s public
comments over the past few years about the rising number of hours its
subscribers stream, and traditional TV ratings declines as measured by
Nielsen.
Many TV network executives have blamed at least some of the ratings
declines on outdated measurement systems that are failing to capture the
true viewing of their programming on digital platforms. They say they
aren’t getting full credit for viewing on mobile devices, for example.
But some executives are starting to acknowledge that subscription video
services like Netflix are stealing viewers from TV. Over the past few
years media companies have found a new and fast-growing revenue stream
from licensing content to streaming players.
In an interview last week, Scripps Networks Interactive Inc. Chief
Revenue Officer Steve Gigliotti said media executives thought deals with
Netflix types “sounded like a good idea” at the time, but “now there are
some serious misgivings about it.”
Netflix didn’t reply to a request for comment. Netflix in the past has
brushed off such concerns, noting that it has helped seed ratings
improvements for shows like “Breaking Bad.”
The purpose of the CAB’s presentation, according to people familiar with
the matter, was to show cable executives that the ratings declines
suffered by the industry weren’t the result of consumers abandoning TV
content, but rather watching it on different devices and services.
Jon Steinlauf, Scripps’ president of national ad sales and marketing,
said his takeaway from the CAB meeting was that the “biggest contributor
to the drop is SVOD,” referring to subscription video-on-demand. The
second-biggest driver, he said, was the increased use of mobile devices
like smartphones and tablets to watch TV-platforms that are still not
measured by Nielsen.
The measurement specialist has said it is working with industry players
to address the need for tracking mobile viewing.
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