Analyzing the why and how of the streaming phenomenon
Netflix, Hulu, Amazon Video, HBOGo… the list of streaming services goes on and on. With more and more people “cutting the cord” in their households, networks are acknowledging now more than ever the huge impact streaming platforms have on viewership.
The New York Times explains, “It’s hard to keep up with the many devices and apps people now use to watch shows. And there is a host of material from Silicon Valley that is competing for viewers’ attention, including Google’s YouTube, Facebook and Netflix. It all adds up to a precarious situation for broadcast TV.” Clearly, network television is on the decline.
Why is this happening?
Well, let’s look at the facts. There’s a sort of generation gap occurring among viewers. For instance, network television shows are drawing older audiences. According to a Nielsen report, the top ten shows on network TV were bringing in audiences averaging 50 years of age. The Good Doctor, one of the most watched shows on ABC, attracted viewers with the oldest average age at 58. (Maheshwari, Koblin)
Another Neilsen report also furthered this notion of a generation gap, pointing out that older viewers spend more time watching TV, compared to their younger counterparts. For instance, those at age 50 and older age range consume an average of six to seven hours of TV per day, while those in the 18-34 age range only average 2 hours and 17 minutes.
Although some may argue that these numbers are due to the fact that older people have more time to spend watching TV, other research suggests that this is more related to the fact that younger viewers are just spending more time on their mobile devices and computers instead of in front of the television set.
So Now What?
With all these streaming platforms, the next question to ask, is whether we are reaching a point of oversaturation. At what point will viewers say “enough” to the growing number of platforms that require a subscription to watch their programming? The answer is unclear, but here are a couple of points that could help lead us to a conclusion.
This topic touches upon three nuances:
SUBSTITUTE OR SUPPLEMENT:
It is interesting to note, that those who are true cord cutters, do not seem to mind paying for more subscription-based services.
On the other hand, for those who are still cable users, they are more unlikely to avoid spending more on a subscription service, which is an extra fee on top of their already pricey cable service, averaging $100 per month.
Parrot Analytics also conducted an international study, asking for viewers’ willingness to pay for multiple streaming platforms. And the research shows that their answer varies based on geography, and potentially culture. For instance, whereas 49% of Americans said they would not pay for any subscription service, audiences in Italy, Brazil, and the UK were willing to pay for more than one subscription service. 82% of Italians were willing, and those in the UK scored the highest for being the most willing to subscribe to four or more services.
This could be due to the fact that international audiences are seeking more ways to watch american programming. As the US is the largest producer of entertainment content, it only makes sense that these international markets would spend on these streaming services to have more access to such content.
PRICE – INERTIA EFFECT
Lastly, Video Ad News points out the idea of the inertia effect – where viewers are actually unaware of how much they’re spending on these platforms. Reporter Tim Cross states, “Research shows this effect in action – a recent study by Waterstone Management Group found that 84 percent of consumers don’t even know how much they’re paying for Netflix. It seems people aren’t yet sitting down and calculating how much they’re paying overall on entertainment.”
So, final thoughts?
With these interesting aspects surrounding the question of oversaturation, all points seem to lead to the industry soon reaching this point of oversaturation. However, it does not seem to be an immediate threat. What seems to be a more imminent, is the changing climate for networks and streaming services alike. Networks seem to be losing more and more audiences. Simultaneously, existing streaming services such as a Netflix and Amazon Video will have more competition, with the launch of Apple TV, as well as Disney +.
Only time will tell what the future of our entertainment industry will look like. One thing is for sure, Hollywood will continue to diversify, making it more accessible for audiences far and wide to enjoy the art of television.
BY: SARI ARAMBULO