Nielsen shines a light on Netflix viewership (NFLX, AMZN)

BII

This story was delivered to BI Intelligence "Digital Media Briefing" subscribers. To learn more and subscribe, please click here.

Nielsen has compiled viewership data for TV shows on streaming platforms such as Netflix, Amazon Prime, and Hulu, reports The Wall Street Journal.

These companies do not publicly share their series' ratings, so Nielsen's estimates offer a fresh look at their performance. The company collected programming data across 40,000 homes using audio recognition technology and then presented the data at the Nielsen Consumer 360 conference earlier this week.

Audience demographics were of particular note, as nearly half of Better Call Saul viewers on Netflix were age 18 to 34, compared to just 24% on traditional TV. This demonstrates how streaming services are influencing demographic shifts in TV viewing habits.

As for viewership ratings, the Season 4 premiere of Orange is ihe New Black amassed 6.7 million viewers in its first two days, which put it in the same league as Game of Thrones, which had 7.9 million viewers for the Season 6 premiere. And Seinfeld reruns on Hulu drew in 706,000 people in their first five days.

This data is increasingly making its way into the hands of producers, such as Sony Pictures Television, Lionsgate, amd NBC. Nielsen is also offering this TV measurement service to any studio that will hand over the audio files of its TV programs.

This development could affect TV streaming in numerous ways. It could help studios negotiate with subscription video on-demand platforms, as Nielsen's data paints a clearer picture of performance on these services. In a way, Nielsen acts as an auditor for Netflix and gives studios better information when they negotiate with the streaming service.

This data could also drive down traditional TV ad prices if the numbers continue to demonstrate that streaming services outperform traditional television.

Finally, Netflix could be preparing to sell ads, which it has never done to this point. But Nielsen ratings for decades have been the determining factor for the value of commercials on television, so this could soon become the case for Netflix.

However, traditional TV and streaming services cannot always be compared directly, as traditional TV is linear and streaming services are on-demand. But many are viewing Nielsen's data on Netflix as a positive sign because it increases transparency, which leads to greater efficiency, competition, and innovation.

Over the last few years, there’s been much talk about the “death of TV.” However, television is not dying so much as it's evolving: extending beyond the traditional television screen and broadening to include programming from new sources accessed in new ways.

It's strikingly evident that more consumers are shifting their media time away from live TV, while opting for services that allow them to watch what they want, when they want. Indeed, we are seeing a migration toward original digital video such as YouTube Originals, SVOD services such as Netflix, and live streaming on social platforms.

However, not all is lost for legacy media companies. Amid this rapidly shifting TV landscape, traditional media companies are making moves across a number of different fronts — trying out new distribution channels, creating new types of programming aimed at a mobile-first audience, and partnering with innovate digital media companies. In addition, cable providers have begun offering alternatives for consumers who may no longer be willing to pay for a full TV package.

Dylan Mortensen, senior research analyst for BI Intelligence, has compiled a detailed report on the future of TV that looks at how TV viewer, subscriber, and advertising trends are shifting, and where and what audiences are watching as they turn away from traditional TV. 

Here are some key points from the report:

• Increased competition from digital services like Netflix and Hulu as well as new hardware to access content are shifting consumers' attention away from live TV programming.
• Across the board, the numbers for live TV are bad. US adults are watching traditional TV on average 18 minutes fewer per day versus two years ago, a drop of 6%. In keeping with this, cable subscriptions are down, and TV ad revenue is stagnant.
• People are consuming more media content than ever before, but how they're doing so is changing. Half of US TV households now subscribe to SVOD services, like Netflix, Amazon, and Hulu, and viewing of original digital video content is on the rise.
• Legacy TV companies are recognizing these shifts and beginning to pivot their business models to keep pace with the changes. They are launching branded apps and sites to move their programming beyond the TV glass, distributing on social platforms to reach massive, young audiences, and forming partnerships with digital media brands to create new content.
• The TV ad industry is also taking a cue from digital. Programmatic TV ad buying represented just 4% (or $2.5 billion) of US TV ad budgets in 2015 but is expected to grow to 17% ($10 billion) by 2019. Meanwhile, networks are also developing branded TV content, similar to publishers' push into sponsored content.

In full, the report: 

• Outlines the shift in consumer viewing habits, specifically the younger generation.
• Explores the rise of subscription streaming services and the importance of original digital video content.
• Breaks down ways in which legacy media companies are shifting their content and advertising strategies.
• And Discusses new technology that will more effectively measure audiences across screens and platforms. 

Interested in getting the full report? Here are two ways to access it:

1. Subscribe to an All-Access pass to BI Intelligence and gain immediate access to this report and over 100 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. » START A MEMBERSHIP
2. Purchase & download the full report from our research store. » BUY THE REPORT