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Netflix Not A Network Killer?

Alan Breznick
7/30/2013

So much for the idea that Netflix is pulling consumers away from the grasp of traditional TV programming.

In a new study released Monday, TiVo Research and Analytics debunks the widely held notion that Netflix is luring TV viewers to the Internet at the expense of the more established broadcast and cable networks. Rather, Netflix users simply appear to be watching more video content overall than their non-Netflix counterparts.

TiVo Research and Analytics (TRA), a wholly owned subsidiary of TiVo Inc., surveyed nearly 10,000 TiVo subscribers in May. The survey found "no significant differences" between the amount of traditional TV programming watched by self-reporting Netflix households and non-Netflix homes. Nor did it find that either group's viewing habits differed significantly from those of the overall TV viewing population.

One strong caveat here is that TiVo subscribers, who tend to be heavy TV users, are not necessarily representative of the entire TV viewer base. So, the survey's results should not necessarily be taken as gospel quite yet.

Still, the results appear to indicate that at least the biggest consumers of network TV fare aren't cutting the proverbial video cord for over-the-top (OTT) video right now. Instead, they are just making greater use of their broadband cords as they watch shows on their TV sets, laptops, tablets, game consoles, etc.

In one notable distinction between the parallel Netflix and non-Netflix universes, Netflix users seem to love their pay TV drama series more than other TV viewers. That seems to be particularly true for fans of "House of Cards," the original Netflix political potboiler that took home multiple Emmy nominations less than two weeks ago.

Indeed, "House of Cards" viewers reported watching 85 percent more HBO programming than non-Netflix households. Similarly, "House of Cards" viewers were much more likely to watch Showtime's "Homeland" series than homes without Netflix.

The study also indicates that TiVo subscribers are bigger OTT video fans than the general TV viewing population. More than half of the survey respondents, or 57 percent, said they subscribe to Netflix, a stunning total for a service that still has less than 25 percent penetration in the U.S.

In addition, nearly one-fifth, or 18 percent, said they had already watched "House of Cards."

Moreover, a full half of those surveyed said they also subscribe to Amazon Prime. Some 18 percent reported that they subscribe to Hulu Plus, Hulu's premium service, and eight percent said they subscribe to all three OTT services at once.

So maybe network programmers need not lose sleep over the likes of Netflix, Amazon and Hulu just yet. Instead, it appears that consumers are the ones losing sleep as they stare bleary-eyed at more screens than ever for longer stretches of time.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

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Atlantis-dude
Atlantis-dude
7/31/2013 | 4:26:38 AM
re: Netflix Not A Network Killer?
Additional video viewing time has been magically created ?!! Somebody has got to lose in this game. Unless they measured it in some way, the survey would be meaningless.
gconnery
gconnery
7/31/2013 | 3:48:02 AM
re: Netflix Not A Network Killer?
I think that your caveat is appropriate. TiVo users are a small percentage of the overall population and most are for example the newer TiVo models are digital only, meaning their users CAN'T record over the air TV signals. They MUST use a cable card and subscribe to digital cable to use their TiVo. So I'm not sure these results mean anything at all about the average Netflix subscriber.

Interesting nevertheless.
Kelly Anderson
Kelly Anderson
7/30/2013 | 8:59:12 PM
re: Netflix Not A Network Killer?
Alan, what did this do for VoD revenues or On Demand viewership for the operators?

I would agree that traditional TV watching would not differ overall (ie sports, current TV series, etc) but I would imagine that going "off platform" for on demand films, VOD revenues from paid content would lag (not to mention the issue of "off brand" behavior of on demand selections). I still say overall that OTT is a threat to other TV revenue lines like VOD and then, of course, content "off brand" vulnerability.

I actually think that Amazon and iTunes a bigger threat as OTTs than Netflix. Both offer current popular entire TV series in a new, fresh (and advance of broadcast) business model that takes viewers from live broadcast and premium television offerings.
sam masud
sam masud
7/30/2013 | 3:34:12 PM
re: Netflix Not A Network Killer?
As a long time Netflix subscriber (both DVDs and streaming) I am that close to cutting my cable TV cord...and will if the charges go up any higher. Also in Netflix's favor, it's demonstrated that it wants to keep me as a customer--my cable TV providers doesn't seem to give to hoots whether I stay with them or not. Bottom line: once there are real choices in the market, people will shop around for a better deal--and that's no secret.
Sarah Thomas
Sarah Thomas
7/30/2013 | 2:59:58 PM
re: Netflix Not A Network Killer?
I am going to start subscribing to Netflix (thanks Chromecast!) soon, and I think I definitely fit in the demographic that will just watch more TV (unfortunate, but true). I am buying it as a supplemental service and because I want to watch House of Cards and Orange is the New Black, not as a replacement. And, I also love Homeland...hmm, I didn't take this survey, but looks like I should have.
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