Half of the 3 percent decline in linear TV viewing in 2015 can be traced to the migration of eyeballs to Netflix (NASDAQ: NFLX), says MoffettNathanson analyst Michael Nathanson, in his latest report assessing the impact of the leading SVOD platform.
"We calculate that domestic Netflix usage represented just under 6 percent of total traditional TV viewing in 2015, using Nielsen data, up from 4.4 percent in 2014," the analyst said in his follow-up to a report issued last April titled, "Is Netflix Killing TV." "We also calculate that, in an imperfect analogy, Netflix sourced 50 percent of the measured decline in Live +7 viewing."
By 2020, he added, Netflix will account for about 14 percent of total TV consumption.
Nathanson finds that Netflix and other SVOD services "continue to be felt in significant pockets of the ecosystem," with penetration of SVOD into broadband users under the age of 45 standing at a whopping 75 percent.
In Nathanson's latest report, the analyst finds that the major broadcast networks are being impacted most by the rise in SVOD consumption. CBS viewing, for example, was 42 percent lower in homes that subscribe to Netflix versus those that don't. That benchmark was 35 percent for Fox, 32 percent for ABC and 27 percent for NBC.
Conversely, Nathanson found that viewership of channels like ESPN was much higher among Netflix subscribers.
This, the analyst said, "suggests that they are essential for core Netflix users."
So is Netflix killing linear TV?
"Currently, Netflix is a source of industry pain," Nathanson said, "but not necessarily a cause of death."
- read this MoffettNathanson report (sub. req.)
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