October 3, 2023

Brighton Journal

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Conventional television usage has fallen below 50% for the first time ever

Conventional television usage has fallen below 50% for the first time ever

Simpson 33 | iStock | Getty Images

The decline of traditional television continues, even as the prices of streaming services have risen.

Total traditional TV usage — made up of broadcast and pay TV — fell below 50% in July for the first time ever, according to Nielsen monthly flow reportthe scale.

Usage among pay-TV customers dropped to 29.6% of TV, while streaming fell to 20% for the month. Streaming accounted for nearly 39% of usage in July, the largest share reported since the first time Nielsen reported monthly numbers in The Gauge’s June 2021 report.

Pay-TV has steadily declined as consumers cut back on traditional packages and opted for streaming. The rate of this decline has only accelerated since the start of the Covid pandemic, when the use of live streaming skyrocketed.

Major pay TV providers, eg Comcast Corp. And Communication charter, often reporting a quarterly decline in customers. Comcast and Charter lost 543,000 and 200,000 pay-TV subscribers during the second consecutive quarter.

“We think the metrics for linear TV are all bad,” Tim Nolen, Macquarie’s senior media technology analyst, said in a recent report.

Pay-TV operators reported a weighted average decline of 9.6% in subscribers year-over-year — losses of about 4.4 million households — and pricing is “not driving up,” according to the Macquarie report.

The total number of pay-TV households has been steadily declining. According to Macquarie, there were 41 million pay-TV households during the second quarter, down from 45 million and 50 million in the same periods in 2022 and 2021, respectively.

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On a year-over-year basis, pay-TV viewership is down 12.5%, while broadcast is down 5.4%, according to Nielsen.

The rise of streaming services, from Netflix to DisneyDisney +, Hulu, and ESPN + to Warner Bros. DiscoveryMax often takes the blame. But many of those operators, including Disney and Warner Bros. Discovery and Comcast, they’re fighting for share and profit from broadcasting while their pay-TV channels and businesses plummet.

Even though viewers are turning more to streaming, subscriber growth for those platforms has slowed, especially for larger services like Netflix and Disney+. Fledgling apps like BasicParamount+ and Comcast’s Peacock have seen more member growth — but their subscriber bases are smaller.

Broadcasters have shifted from using subscriber growth as a measure of success, and are instead pushing for profitability in the sector as the traditional TV business shrinks.

Many consumers have left the traditional TV package because of its exorbitant prices. Now, streaming companies are also raising prices across the board — including Disney for ad-free Disney+ and Hulu subscriptions — in an effort to boost revenue.

Macquarie noted in his report that the growth of non-streaming and streaming subscribers has not helped much in their pursuit of profitability.

Patrick J. Adams as Mike Ross in Suits.

Shane Mahood | USA Network | NBC Universal | Getty Images

Advertising is playing a bigger role in driving revenue, and companies are looking to crack down on password sharing. Reducing content expenses—especially for original programming—was a big part of the cost-cutting strategy.

The move away from the originals comes because licensed programming—particularly from traditional outlets—is often some of the most watched content.

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For Netflix, the last hit It was “Suits,” the series that originally aired on NBCUniversal’s USA Network. The show, which co-star Meghan Markle previously only hosted on Peacock. The series appears to have increased streaming viewership on Netflix, as has Peacock, which accounted for 18 billion minutes watched in July, according to Nielsen.

Netflix viewership was up 4.2% during the month, bringing viewers to 8.5% of all TV usage. Behind it, Hulu, Amazon’s Prime Video, and Disney+ followed — which likely got a boost from the children’s cartoon, “Bluey,” another licensed program rather than an original.