What’s Really Happening with TV and Video Viewership?
by Dave Coleman, SVP of Strategy & Development at Ocean Media
There has been a recent increase of articles in trade publications and news sites that speak of the rapidly approaching demise of linear television (live TV + 3 days time-shifted). They choose statistics to make it seem all but a forgone conclusion that people are hardly watching TV anymore and the entire industry is on the brink of collapse. Here is some Nielsen data to provide clarity on what is (and isn’t) happening with linear TV viewership, and how that consumption is shifting to different video channels over time.
Live TV viewership is at the center of this debate, and with good reason. Among Adults 18-24 live TV viewership has decreased by a third over the past four years. Overall TV viewing by all Adults has decreased by about 10% during that same time. With that said, TV is still the fastest and most efficient way to reach a mass audience with a video message. The average US adult is still watching nearly 4 ½ hours of TV every day, with 88% of that TV viewing being done live! In comparison, all non-linear video viewership (including desktop, mobile, and OTT devices) is just under 1 hour per day. At 85% more daily consumption, it’s very clear that TV still holds the majority of viewership for the average adult.
Of course, this consumption is not the same across all demographics. It’s probably not a surprise that older adults watch much more TV than Millennials (here defined as Adults 18-34). This younger, yet increasingly valuable audience was raised in the digital age and is ushering in new consumption patterns across industries. Compared to the average adult, the average millennial watches significantly less TV (around 2 hours a day). Although overall TV time spent is less, it’s still twice as much time when compared to their 1 hour daily non-linear video viewing. That said, it is impossible to ignore how much video viewing is happening among this audience. At this rate of change video will likely be at parity with TV viewership in the next 4-7 years resulting in a continuous decline in Millennial reach for linear Television over time.
So what, then, is actually happening? In a word – fragmentation. Consumers have more choices than ever. They are in the driver’s seat and that dynamic won’t be shifting. For example, in the past few years, streaming video viewership via OTT services like HULU, Netflix and HBO, has grown to account for nearly 10% of all TV/Video consumption. Fragmentation is also continuing in the TV space. For the past several years people have been consistent in watching about 20 TV channels in a given month. This is typically a mix of large reaching networks like ESPN, CBS, and HGTV, and more niche networks like Science and History Channel. The challenge here is that the amount of choices makes it increasingly difficult to grab reach among a large audience at a relatively efficient price.
Cord cutting is another factor that needs to be considered. The accelerating trend of people cutting cords, and never plugging the cord in to begin with is alarming. eMarketer predicts that this year about 75% of households will have a traditional cable subscription which was 90% just four years ago. Ultimately, cable TV networks will have to adjust their business model if they want to keep that trend from continuing. One key way the people are “cutting the cord” is by moving over to skinny bundles (like Sling TV) that include cable television networks. Those numbers are not accounted for here, making the statistic a bit misleading. When including those roughly 4M subscriptions to skinny bundles, the penetration is closer to 78%.
While it’s clear that TV consumption is shifting, it will continue to be an important part of the media mix for the foreseeable future, regardless of the age demographics you are targeting. As consumption shifts, advertisers will need to shift their video strategy to no longer rely solely on linear TV viewership to drive the same reach as prior years. Viewership fragmentation calls for a cross platform video strategy in order to hit a large group age demographic like A18-49 or A25-54. The reach is still there, and Ocean Media has been using our research and analytics tools to capitalize on efficiently targeting as well as measuring these audiences as they migrate across screens. TV advertisers that are not using sophisticated planning and analytics tools to understand the impact across TV and Video screens are missing key audiences putting them at a distinct disadvantage against their competitors.