Streaming Becomes Most Popular Way to Watch TV for First Time Ever; What Finally Pushed It Ahead of Traditional TV?
There’s streaming success all around thanks to the newest Nielsen report on viewership. For the first time since its inception, the streaming industry has taken first place as the preferred way to consume TV content according to the entertainment management firm. While streamers have outpaced broadcast stations in the past, July marks the first month where digital content beat out the long-time heavyweight, cable TV.
A Zero-Sum Game
To put things in perspective, it’s not that consumers are watching more TV than before. Nielson’s data indicates that the number of hours viewed has remained constant over the past few months and holds close to last year’s numbers as well. That makes gains in the streaming sphere much more noteworthy since viewership has become a zero-sum game. The losers are broadcast and cable, a trend that Nielsen feels is likely to continue.
The current uptick in streaming even outpaces early pandemic rates, with an average of 190.9 billion minutes watched last month as opposed to April 2020’s 169.9 billion. From July 2022 through the first week of August, the five-week span represents the highest amount of streaming on record.
To clarify, the divide between cable and streaming viewership is more of a lazy flowing creek than a raging river, with the former holding 34.4% of the share as opposed to the latter’s 34.8%. While 0.4% is not a huge gap, it does suggest that Netflix CEO Reed Hastings may finally be correct in saying that linear TV, which includes satellite and cable options, is knocking on Death’s door.
The Content Crunch
Nielsen’s analysis found that July’s streaming usage increased 3.2% from June, with a year-over-year of 22.6%. The biggest gains came from Hulu, Netflix, Prime Video, and YouTube, most of which are due to original programming. With Season 4 of “Stranger Things,” Netflix was able to pull in nearly 18 billion minutes alone, bolstered by other exclusive titles including “Virgin River” and “The Umbrella Academy.”
Hulu’s originals “The Bear” and “Only Murders in the Building” snagged the Disney streamer 3 billion minutes watched, while “The Terminal List” and “The Boys” drew 8 billion on Amazon’s streaming platform.
Original content has been a foundation for many streamers as they use their exclusive libraries to attract subscribers. A recent Parrot report indicates that exclusive programming is one of (if not the) the primary factors when consumers are shopping around for subscription options. Paramount+ has taken notice as it pushes to increase its own originals catalog, hoping to launch 150 original international shows by 2025.
Conversely, Netflix and HBO Max are moving in the opposite direction, with Hastings' company capping its content spending for the foreseeable future and HBO cutting international productions across the board.
Cutting the Cable
Traditional TV viewership continues a slow yet, seemingly inevitable, decline as evidenced by broadcast watchers dipping to 21.6% of the market share, a 3.7% monthly fall, and a year-over-year drop of almost 10% total. Meanwhile, cable viewership dropped by 2%, which is down 8.9% from last year.
While Nielsen seems to indicate that this is a trend that streamers will continue to see, in reality, these losses may be due, at least in part, to a drop-off in live sports programming during the off-season summer. With sports keying up to be the main reason that viewers are holding on to their linear plans, the industry may see a rise in viewership over the coming months as the American professional and collegiate football seasons begin in September.
However, Nielsen’s numbers indicate that streaming is continuing to make market gains, and even small increments add up to big wins over time. Original content continues to spur new gains in viewership, though some companies are actually moving to decrease spending as competition between streamers begins to slacken.
While seasonal sports may keep these numbers in flux for the time being, streamers are moving into that space as well which will only further to widen the divide.