nScreenMedia OTT multiscreen media analysis

Traditional TV viewing decline continues undiminished

Live+dvr viewing by age group 2012 2016

TV channel providers might be lured into seeking solace in a modest uptick in the use of DVR usage in Nielsen’s Q2 2016 Total Audience Report. This would be a mistake. There is no good news in the data for traditional TV viewing.

TV viewing declines continue

The Live-plus-DVR viewing decline between Q2 2015 and Q2 2016 did moderate somewhat over previous quarters. In Q2 2015, the drop in viewing over the previous year was 3.4% and the previous quarter (Q1 2015) 8.5%. Both those losses were reduced in 2016. Year-over-year (YoY) declines were 1.6% and quarter-over-quarter (QoQ) fell 7.9%.

However, this moderation was due to one change alone: those 35 and older used their DVRs significantly more than in Q2 last year. Overall, timeshifted viewing increased 2.1% (or just under a minute per day) to 3 hours and 11 minutes a week. The biggest increase in usage was in the over-65s. This group increased DVR usage 9.5%, or 3 minutes a day, over Q2 2015. Increases in the 50-64 age group and 35-49s were significantly smaller, 5.7% and 3% respectively.

The under-35s continue to move away from traditional television at about the same pace as in previous quarters. For example, live+timeshifted viewing was down 8% YoY in the 18-24s, and has fallen by a third since 2012. 12 to 17-year-olds watched 14% less YoY in Q2 2016, and viewing is also down a third since 2012. The size of the declines has not changed significantly for well over a year.

Pay TV audience shifts to older consumers

This is a very disturbing trend for TV providers. Simply put, the traditional television audience is aging. Younger people are spending more and more time online, while older American’s continue to watch as much TV as ever. The net result is a gradually decline in the audience for TV and in the number of pay TV subscribers. Nielsen reports that the number of pay TV subscriptions declined 1.75M YoY in Q2 2016. Over the same period the number of broadband only homes increased 25%, to reach 4.1M.

Industry stalwarts such as Comcast are acutely aware of this trend. They are doing everything they can to bring the young into the pay television fold. For example, Comcast is ramping up its efforts to bring pay TV to those living on college campuses with Xfinity On Campus. But trying to capture college age kids could be too late, as their viewing behavior is already established by the time they get there.

New media continues robust growth

Weekly time using a multimedia device by age q2 2015-2016Conversely, new media platforms continue to enjoy vigorous growth across all age groups. Multimedia player usage (Roku, Apple TV etc.) saw an overall increase of 56% YoY, to one hour and 40 minutes a week. The biggest users of the devices are the 25-34s, watching 2 hours and 43 minutes a week. The biggest increase in usage was the in the 50-64s. Their usage increased 67%, to one hour and 12 minutes a week. Similarly, strong increases were seen in video viewing on smartphones (up 60% YoY overall), and the PC (up 22%.)

change in device usage for video between q2 2015 2016Not surprisingly, the devices and services used in the home continue to drift away from traditional devices, toward connected.  Blu-ray/DVD penetration fell from 79% to 76% over the last year. Multimedia devices are now in 27% of homes, and 60% of homes also have a tablet. Oddly, game console penetration dipped from 46% to 44%.

Why it matters

Several reports on Nielsen’s Q2 2016 said that the flight from traditional television has moderated somewhat.

Though there has been an increase in DVR usage in the over 35s, it was the only increase of note.

Across the board decreases in live viewing and in DVR usage among the under 35s were as large as ever.

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