Is Netflix beginning to push cable TVs towards extinction?

By | March 13, 2015
Neflix crushes cable

Netflix seems like a booming speed train that cannot be stopped and its beginning to flatten cable. Four out of ten American households apart from having traditional television now also subscribe to streaming service like Netflix, states new Nielson report on audience behaviors.

Neflix crushes cable

More than 40% of all U.S households with TV and broadband Internet use subscription video on-demand service like Netflix, Amazon Prime or Hulu Plus according to the report. The number has increased from 36% of households that reported having on-demand subscription video over the same period of time in 2013. Among the households subscribing for the services, Netflix tops the charts with 36% of households followed by Amazon Prime with 13% and Hulu Plus with 6.5%.

As the number of homes with streaming video subscriptions rises, an increasing number of American homes are Internet-only, subscribing to broadband Internet and not TV. Internet plays a vital role in making consumers decide between online streaming service and traditional TV.

The study shows how streaming video not only complements – but also challengesĀ  existing cable/satellite packages. Some media executives have blamed a recent drop in cable TV rating on the growing popularity of Netflix. Indeed, traditional live viewership of TV channels remains high, but not as high as it used to be before.

According to Nielson, Americans are spending more time-consuming media than watching TV. However, we still watch a lot of live TV. The adult on average spends 4 hours and 51 minutes watching live TV each day. However, this is down 13 minutes from last year, the report stated.

Though the study does not specifically project how many minutes a day households spend watching video through streaming services, it notes that Netflix and other services still have a lot of space and opportunities to grow. 35% of American TV households have broadband access but do not have any streaming video subscriptions. The remaining 24.5% have no broadband connection.

Recent report suggests the media giants like Time Warner and Viacom take measures to sell video subscription directly to consumers, without cable providers. Also, earlier this week Time Warner’s HBO announced HBO Now, a streaming package that does not require cable and will soon be available on Apple devices.

Broadcast, satellite and cable networks are slowly dissolving in a shift known as cord-cutting. Cable networks, for one, saw big ratings declines in the latter half of 2014. Rating among the adults dropped 9% last year, which has increased three timesĀ from 2013’s decline. Of course, live watching still accounts for the greatest chunks of TV consumption, so the demise of traditional TV is not imminent – but the trends are clear where its leading.