Wow, as if we needed any other indication that streaming is becoming the norm, Netflix is about to attract a larger audience than any of the four major networks.
According to Variety, “If Netflix were a Nielsen-rated TV network, the No. 1 streaming service would, within a year, attain a larger 24-hour audience than each of the major broadcast networks — ABC, CBS, Fox and NBC — according to a Wall Street analyst firm [FBR Capital Markets].”
Of course, Variety points out that the comparison is not “apples-to-apples,” since a streaming service is not measured like a typical broadcast station: “Nielsen TV ratings cover, at most, up to seven days of VOD and DVR viewing — and exclude online-video views, which networks say are an increasing part of the pie. Moreover, TV networks provide a different blend of content, such as live sports, that Netflix doesn’t. And anyway, Netflix doesn’t care about ‘ratings’ of individual shows, given that it doesn’t sell ads and has steadfastly refused to disclose anything but general data about viewing.”
However, analysts say their comparison comes from the “trajectory of Netflix users’ hours spent viewing [which] illustrates the company’s growing market power, not just in the U.S. but internationally.”
How did they arrive at the numbers? According to the analysts, Netflix users streamed about 10 billion hours in the first quarter of this year, about two hours per day per subscriber.
To determine Netflix’s “Nielsen rating,” they divided that two hours by 24 hours, then multiplied that by the number of U.S. Netflix subscriptions as a percentage of households.
As a result, Netflix would score on par with ABC and NBC for Q1. They report that at Netflix’s compound annual growth of around 40 percent, and with all broadcast on the decline, Netflix is on track to have a larger audience than any major network within a year.
The analysts also asked consumers to pick between Netflix and paid cable or satellite TV. Consumers favored Netflix, with 57 percent saying they’d take it over paid TV or cable any day.
“Netflix subscribers clearly like it more than pay TV, which we see as arguing for pricing leverage, since pay TV, on average, costs over $80 per month,” the analysts wrote, citing Netflix’s average $8 monthly subscription cost, as reported in Variety, adding that Netflix had “62 million-plus worldwide subscriber base as of the end of March.”
The Super Bowl on Netflix? Could happen someday, maybe sooner than we think.
