Traditional television watching is declining faster than ever as streaming services become a mainstream feature in American homes, according to new research by Nielsen.
Adults watched an average of four hours and 51 minutes of live TV each day in the fourth quarter of 2014, down 13 minutes from the same quarter of 2013, according to Nielsen’s fourth-quarter 2014 Total Audience Report. Viewing was down six minutes between the fourth quarter of 2013 and 2012. And between 2012 and 2011, viewing time actually increased for live TV.
At the same time, more homes turned to online video, with 40 percent of U.S. homes subscribing to a streaming service such as Netflix, Amazon Instant Video or Hulu compared with 36 percent in the fourth quarter of 2013, according to Nielsen. Netflix is by far the most popular streaming service, in 36 percent of all U.S. homes, and Amazon Instant Video is in 13 percent of homes.
The trends have rattled the entertainment industry, with broadcast and cable networks scrambling to take on new competitors on the Web. Cable networks have seen steep ratings declines, which got much worse in the last six months of 2014. Cable ratings among adults fell 9 percent in 2014, three times the rate of decline over 2013, according to Michael Nathanson, an analyst at Moffett Nathanson research.
“It’s hard to ignore our belief that technology is disrupting viewer consumption of linear network programming,” Nathanson wrote in a recent research note.
In response, companies such as HBO, NBC and CBS are launching their own streaming services. The moves could unleash a fast demise of the cable and satellite industries that have fed TV networks with licensing fees.
Television is still king, with viewers of all ages getting the vast majority of their video entertainment and news from live programs and using time-shifted services such as DVRs. But even older viewers — the stalwarts of traditional TV — are spending less time watching live TV and programs saved on DVRs.