Thursday, June 19, 2014

Netflix vs. Cable: How Viewers Watch TV in the Summer

Summertime TV is here and we have one question: Will you be reaching for your remote, or your laptop?

In the summer, audiences consume shows in different ways. The hot few months affect how, when and what we watch on many levels, especially when it comes to Netflix versus cable TV.

Yes, while Netflix is continuing to throw cable television into a panic, there are still areas where the traditional tube rules. From a numbers perspective, it has a tight grip on U.S. viewers.

About 99% of U.S. households (the total of which are in the 115 million range) have a TV, and 56% have cable. Compare that to Netflix, which has more than 48 million members worldwide. That means its entire global viewership is still not even half the U.S. However, that's not bad for a company founded in 1997, tackling a nearly 64-year-old industry.

In the summer months, it's easy to assume Netflix usage would go through the roof, thanks in part to younger students who now have three free months of time. You'd think the TV would be left dormant, untouched because it lacks the immediacy of online binge watching. However, that's not the case.

While Netflix doesn't share specific data on its viewers, spokeswoman Jenny McCabe said the site doesn't acquire more subscribers during the summer months. Rather, it picks up more viewers in Q1 (January, February and March) and Q4 (October, November and December).


statista chart

This chart from data site Statista shows the number of Netflix streaming subscribers from 2011 to 2014.


In the dark and dreary months, people are more likely to hole up indoors and stream what they want. In Q4 2013, Netflix acquired 2.3 million new American households, the highest performance in three years.

From a strategic standpoint, Netflix is starting to up the ante for summer viewers by airing original shows like Orange is the New Black in June.

Unlike cable TV, with all its specifications and obsessions, Netflix isn't interested in gathering data on its subscribers (for now). It just cares about what people are watching, McCabe says.

That's just one of many ways it differs from cable. Catering to the audience is where cable TV shines. Different networks target viewers based on studies about their viewing habits. The viewer that TLC is trying to obtain is not the same one that FX is trying to obtain.

However, one of the downsides of cable TV viewing in the summer is that many shows air new seasons during the fall or spring. Summer is instead dominated by reruns and reality television.

There are, of course, exceptions. AMC debuted the new show Halt and Catch Fire on June 1. Premium network HBO will air True Blood and new series The Leftovers at the end of June. Broadcast networks are also taking a summer approach; Fox will air limited series 24: Live Another Day until July 14, and CBS will debut Extant, starring Halle Berry, on July 9.

It helps networks keep up with the changing landscape of television. Quartz reported that many networks will aim to produce year-round lineups, to keep viewers engaged for 12 months, rather than just the run of a season, like 10 weeks of Game of Thrones or seven weeks of Mad Men.


peggy olson gif

Peggy Olson kicks back and watches TV in an episode of 'Mad Men.'


Despite the freedom to watch whatever, whenever, the orderly mindset of devouring one show at a time carries over to Netflix. The average user prefers to watch a series from beginning to end, consume it wholly, then move on to the next thing, according to McCabe.

Though Netflix does not share what shows increase in popularity over the summer, McCabe says viewers in general tend to gravitate toward offerings in the "New Releases" section. Whatever's sitting there will automatically get a boost. Big names currently hanging out in that section include Breaking Bad, The Walking Dead and Arrested Development รข€" juicy titles for any TV viewer.

But how about the younger crowd? Kids have actually directly increased Netflix traffic in the summer.

"We see about a 30% increase in family and kids content viewing hours during summer," said Ted Sarandos, Netflix's chief content officer, in a press release.


netflix chart

Data site Statista compiled statistics about key childrens' usage of Netflix as of June 2013.


Image: Statista



Thanks to summer vacations, kids are watching way more Netflix. Considering how tech-literate children have become, it will be interesting to watch how cable TV fares against Netflix as this younger generation gets older, raised with both options.

The TV realm will certainly get more shake-ups over the years as new services vie for viewers. As a whole, cable TV subscribers are slowly starting to decline, binge-watching is becoming the new normal and speculation of the future runs rampant (hey there, Oculus Rift). There are lots of evolving pieces.

For this round, cable TV and Netflix largely dominate the conversation. Stay tuned to see what happens next.

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