Credit: Netflix

Analyst: SVOD Hurting Pay TV Less Than Expected

Traditional viewing roughly stable, Wieser says

Amid the panic about the effect Netflix and other streaming video-on-demand services are having on the health of traditional TV, analyst Brian Wieser of Pivotal Research Group took a close look at Nielsen numbers and found that SVOD is having less of an effect than some might expect.

According to respondent level data from Nielsen, penetration of SVOD service rose to 58% of TV homes at the end of the first quarter of 2017 from 51% at the end of the first quarter of 2016.

In homes with SVOD, TV viewing fell to 64.3 hours per week at the end of Q1 2017 from 65.9 hours in Q1 2016. Viewing in homes with no SVOD service was unchanged at 73.5 hours.

“Overall, the data we have analyzed reinforces our view that any expectations around the ‘death of TV’ because of SVOD services are likely overstated,” Wieser said. “Homes with SVOD services are reducing consumption of non-internet-connected-device-based TV faster than homes without SVOD services, but not by much. Including consumption via internet-connected devices, homes with SVOD services are exhibiting more favorable traditional TV consumption trends as their SVOD services gain share of TV consumption.”

He adds that as SVOD services attract lighter TV viewers, they will probably cause less of a reduction in consumption.

And if consumption on non TV-based devices were included, it is possible there’s growth in the consumption of professionally produced video content even within SVOD homes, he said.