July 29, 2012

With the launch of the London Olympics and NBC’s relentless coverage on six different outlets (NBC, MSNBC, CNBC, Bravo, Telemundo, NBC Sports Channel, and E!), and with Netflix reporting 1 billion hours of streaming viewership in June, you might ask where are people watching TV? Jeanine Poggi of AdAge had an interesting take on this in a July 6 story.

She reported that analysts believe that Netflix’s audience has now surpassed any individual TV network. But is Netflix’s growing streaming video audience cannibalizing hours spent watching commercial-sponsored television like the Olympics? Well, not yet.

Old-fashioned TV still dominates. People watch more than five hours of traditional TV a day each month, according to Nielsen research. Netflix’s billion hours of streaming content works out to less than 1.5 hours a day (80 minutes) for Netflix subscribers. So, relax NBC. Your multi-billion dollar Olympic investment is probably worth it. Of course, the disjointed opening ceremony with its few good moments certainly wasn’t worth 4.5 hours!

But with the average cable bill at $86 monthly, according to the AdAge story, and Netflix charging $7.99 per month for streaming, the handwriting is on the wall. Netflix customers now pay a little less than 23 cents per hour for content without commercials, while cable-TV subscribers pay around 56 cents per hour for programming with advertisements. That’s why networks are desperate to sell digital (cable and internet) rights to make up for the continuing decline in advertising revenue on traditional TV.

Note to 2013 media planners: start looking seriously at advertising on sponsor supported streaming video.

One comment

  1. Read where NBC seems to have shot themselves in the foot by delaying the showing of the opening ceremonies and angering their viewers. Folks wanted to see it live but NBC wanted to put it in primetime. They don’t call it dinosaur media for nothing.

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