Live TV Viewing Is Flat, DVR Viewing Is Up Slightly, And Online Viewing Is Still Tiny, Contrary To What You May Otherwise Have Heard
If you spend too much time listening to some people you’d think nobody watches TV anymore, they all watch online, and TV viewing is dead.
For those folks, actual data is often inconvenient, like the numbers in this research note from Brian Wieser at Pivotal Research:
BOTTOM LINE: Yesterday, Nielsen published its “Cross-Platform” report for 2Q13. TV continues to hold up well – and dominate – among all audience groups, as it remains the broadest reaching medium with the greatest amount of inventory tonnage. The data illustrates why traditional TV will continue to be the primary beneficiary of ad budget allocations for large brands. This is favorable for companies under our coverage including CBS, Viacom and Discovery, but also highlights that Facebook and Google will need to focus on non-TV budgets to generate the growth that many investors expect from their online video initiatives.
Nielsen’s Cross-Platform reports are key tools in assessing media consumption trends, as their processes reflect input from many of the industry’s best researchers and decades of experience of stratifying their samples. The Cross-Platform report data is more meaningful than the ratings data much of the industry focuses on because this report is based upon more forms of TV consumption, including local and national viewing. By contrast, the NTR sample which most observers look at weekly or monthly is part of an incomplete sample for those looking to assess broader viewing trends. The Cross-Platform data does have limits, such as the exclusion of consumption on connected TVs and tablets. It is also limited by small sample sizes which mean that smaller audience groups may have large standard errors, leaving some room for interpretation of many of the figures produced in these reports. Historical comparisons may also be challenged by processing errors or other methodological changes.
Key points from our analysis of Nielsen’s latest Cross-Platform report include the following:
· Total time with “traditional” (i.e. live-only) TV was flat year-over-year, per person. We calculate nearly 11 billion person-hours of time-shifted viewing (i.e. via DVRs or VOD) during 2Q13. This amounted to 8.6% of TV viewing in the quarter up from 8.0% in the year-ago period. However, we calculate 114 billion person-hours of live TV viewing hours occurred during 2Q13, slightly higher than in 2Q12, meaning that in absolute numbers traditional TV held up despite a higher share of time-shifted viewing. We note these figures incorporate Nielsen’s population estimates (which were flat year over year, vs. US Census Bureau estimates of 1% growth year-over-year).
· Viewing of TV by kids 2-11 was flat per-person during 2Q13, although down in aggregate year-over-year largely because of Nielsen’s reduced population estimates. During the 2011-2012 broadcast season, Nielsen incorporated an estimated population of 41.2 million kids 2-11, but during the 2012-13 season reduced that estimate by 4%. This has the effect of depressing reported kids’ viewing levels to a notable degree, although the effect will rebound as Nielsen’s population estimates will generally converge with those of the US Census Bureau.
· Online video viewing reported by Nielsen equated to 2.3% of total TV viewing among the whole population, although unmeasured tablet viewing should add significantly to this amount. Among the population who actually watch online video content, the equivalent of 4.4% of viewing was reported to have occurred via online video. Among kids 2-11 only, the 1.7% of total viewing occurred via online video, with 3.1% of viewing among the sub-set that actually watched online video during the quarter. Historical data was characterized as not trend-able due to a processing error which rendered 2Q12 as inflated. However, we also note that these figures are likely understated given the absence of inclusion of tablets (although with only 27 million households – or around a quarter of the total – in possession of tablets as of 2Q13, our guess is that at best online video viewing might be double the stated figure).
· Traditional TV remains relatively broadly popular, while online video and internet use in general remains concentrated among relatively smaller groups of the population. Nielsen’s data indicates once again that while there is some concentration among TV viewers. The 16% of the population not on the internet paired with the 17% heaviest consumers of TV – one third of the population, in total – account for 64% of TV viewing. However, virtually the entire population continues to watch significant volumes of traditional TV (even the lightest 17% of TV viewers continue to watch 8x more traditional TV than they watch online video). Concentration among use in other media is much worse, and light users are very light users. For example, the 10% of the population which are the heaviest users of online video account for 84% of total online video viewing. Including the next 10% heaviest users, we can identify 20% of the population as accounting for 94% of online video consumption. Similarly, we can identify that less than 25% of the population account for nearly 90% of time spent with the internet more broadly.
As has long been the case, the data included in Nielsen’s report highlights the nature of traditional TV as the medium best able to satisfy reach and frequency-based media goals against broad populations. This is important to note as web-based media owners such as Google, Facebook and others position themselves as capable of capturing traditional TV budgets. While there will always be certain marketers who look at the market through different lenses, or alternately get comfortable with the hybrid measurement processes and workflows that allow them to budget for and execute against video in a relatively holistic manner, our view is that these efforts will account for a small minority of video-based ad spending for the foreseeable future. Instead, we continue to believe that online video will primarily capture share from budgets which would otherwise be directed towards traditional premium display advertising (including conventional display inventory which would otherwise be sold by portals such as Yahoo, AOL and MSN).
FULL REPORT INCLUDING DISCLOSURES CAN BE FOUND HERE: TV Update 9-10-13.pdf