They say old habits die hard, but when it comes to video that may not be as true as it used to be. Live TV viewing, video renting, and movie watching look set to continue to decline in 2018.
Steep declines in live TV viewing continue
Live TV viewing has been declining between 2% and 6% less each year for the last four years in the US. In Q2 2014, Nielsen says the average viewer watched 27 hours and 50 minutes a week. In Q2 2017, weekly viewing has fallen more than 3 hours, to 24 hours and 20 minutes. At this rate, by Q2 2018 the average viewer will be watching 22 hours and 30 minutes a week.
The decline is much steeper among younger viewers. Weekly live viewing has declined between 8% and 17% per year since 2014. Between Q2 2014 and Q2 2017, viewing among the 18 to 24-year-olds fell almost an hour per day, to 11 hours and 20 minutes per week. At this rate, this age group will be watching just 9-and-a-half hours per week in Q2 2018.
As with all averages, it is hard to know how an individual may behave. However, other data suggest that live television viewing is becoming an increasingly rare occurrence for many. The average active Roku user spends more of their TV time watching streaming video rather than traditional media. Netflix says the average subscription streams an hour-and-a-quarter of video per day through the service.
As more options for live and on-demand viewing appear online in 2018, expect this trend to accelerate.
Video rentals continue steep decline
Consumers continue to turn their attention away from the traditional way they have watched movies at home. The rental market through stores, kiosks, and online providers like iTunes continues to contract at an alarming rate. Revenue from the second quarter, which is normally a slow time for video rentals and purchases, has seen big declines over the last several years. Between 2013 and 2017, the industry lost half-a-billion in revenue, generating just $1 billion in Q2 2017. That decline seems set to continue in 2018, with revenues likely in the $900 million range in Q2 2018.
Again, the data illustrates how the once common practice of renting videos is becoming increasingly rare. Surprisingly, the problem does not appear to be simply related to convenience. Certainly, going to a store to rent a movie or waiting for a disc to arrive by mail is hardly in line with the on-demand convenience of online delivery. However, online video rentals have been declining throughout 2017 too.
As more quality content appears in SVOD libraries and new online video services, expect the decline in rentals to accelerate in 2018.
Watching movies less common
The shift away from renting videos shows people aren’t watching as many movies as they used to. The lackluster performance of video sales reinforces this trend away from movie watching. Between Q2 2014 and Q2 2017, purchase revenue declined nearly 10%. Though electronic sales have been making steady gains, it has not been enough to make up for the prodigious decline in disc sales.
As well, fewer Americans are going to movies. This summer saw total gross summer theater ticket sales fail to reach $4 billion for the first time in a decade. Overall, it looks like domestic box office receipts will finish down 2.3%, for a total of $11.1 billion.[Update: Boxoffice Mojo says US and Canada theater ticket sales fell 5.8% in 2017 to reach 1.24 billion. Ticket sales haven’t been this low since 1992.]
The big SVOD providers are putting some of their huge content budgets toward the creation of movies. For example, Netflix says it will produce 80 movies for its service in 2018. However, most of the money is going toward TV-style content, making the continued drift away from movie watching likely to continue in 2018.
Why it matters
Old video viewing habits are are falling fast as people transition to online. The trends look set to accelerate in 2018.
Live viewing is in serious decline, and the young will watch just 9-and-a-half hours per week by mid-year.
Video renting is declining fast too, and industry revenue will likely fall a further 10% between Q2 2017 and Q2 2018.
The number of movies people watch at home and in the theater is falling, and the trend will continue through 2018.