Bernstein Research has introduced a new weekly tracking report analyzing ad-supported U.S. TV networks' viewership on a year-over-year basis. The first version, released today, shows that for the week of November 10-16, audiences fell again across the board: down 8% for cable networks, 9% for broadcast and 17% for kids-oriented networks specifically. The declines were similar on a quarter-to-date basis as well.
Bernstein has previously calculated that ad-supported TV networks' audiences declined by around 13 minutes per day in Q3, while SVOD viewership increased by around 12 minutes per day, making SVOD the dominant driver of the TV networks' audience erosion.
Bernstein believes this is early evidence a structural shift of audiences away from ad-supported TV viewing and toward SVOD viewing in particular. In Bernstein's view, SVOD services have become "way too good relative to their very low cost" to solely act as an augment to pay-TV bundles any longer, and are now in fact becoming a bona fide substitute for certain viewers in certain situations (Raise your hand if that sounds like your household. It's long been the case in mine).
The appeal of SVOD services is based on many attributes - monthly cost, variety/quality of content, compatibility with multiple devices, binge-viewing opportunity, video delivery, etc. But as a comparison to live or even C3 TV, the ad-free experience is perhaps the most critical differentiator. As virtually every SVOD viewer will gush, it is far more enjoyable watching without commercial interruptions, particularly highly engrossing programs (a key reason serialized dramas have done so well in SVOD).
As Bernstein has previously written, it doesn't foresee any reason for a reversal of fortune for TV networks any time soon. In fact, things may likely get worse, to the extent that TV networks and their studio brethren ramp up their SVOD licensing, partially to offset declines in advertising revenue. This would make SVOD content selection even stronger.
Meanwhile, online video advertising continues to boom, and the shift to programmatic approaches is contributing to advertisers buying audiences, not just programs/context. Last but not least, the rise of YouTube and the flood of online originals is further fragmenting audiences, particularly younger ones (see yesterday's news that Minecraft-related videos on YouTube have generated a staggering 47 billion views).
All of this contributes to the uncertainty roiling the broader video industry these days. As Bernstein continues sharing weekly TV ratings, I'll continue reporting on them and helping to interpret.
(To learn more about these shifts, come to VideoSchmooze in NYC on Thursday, Dec. 4th, where our opening session will feature Nielsen's SVP, Client Insights, Dounia Turrill discussing the new Q3 '14 Cross-Platform report.)