Streaming Services and the Olympics Highlight Viewing Trends posted: 24/02/2018
by Andy Marken
Even though you're doing your part, TV viewing is slipping. Forrester's Jim Nail recently reported that the ratings of top shows have declined an average of 25 percent over the past five years. Even NBC reported that TV viewing of this year's Winter Olympic Games was down six percent, compared to the viewing audience numbers from 2014. We have to look behind the gross numbers to explain the apparent downturn.
Rationalizing the decreases in different ways, Nail and NBC used their unique interpretation of Chris Anderson's Long Tail distribution discussion he popularized back in 2004 in Wired magazine.
Selection Rules - All of the video content services, including YouTube, place a premium on material that attracts large volumes of users. Netflix expands its customer base by having exclusive content people just have to watch and YouTube rewards channels with greater ad income by viewership. But now, there's a world of content available for mainstream and niche content producers and viewers.
Simply stated, the industry suffers from an embarrassment of overabundance:
The old cable formula still offers something like 1,000 channels, even though folks only visit seven or eight.
OTT (over the top) streaming content has 100s, 1000s of free/paid channels.
300 hours of video are uploaded to YouTube every minute, 1M videos are uploaded to Snapchat every day.
There are 7.6B plus people on the planet, roughly half of them (3.6B) have an Internet connection, about 80 percent of the world's households have a TV and there are 2.5B smartphone users worldwide.
According to Nielsen, contrary to TV viewing dying, the audience is up about five percent, compared to four years ago.
Rather than watching just one or two channels per day, the number of channels viewed has almost doubled and the method used for viewing shifts throughout the day.
Online Tracking - With streaming content, people can grab a quick video fix between/during classes or boring meetings or catch-up on shows they missed on the ride home on the device in their hands and can still have a chance to watch news, sports or the new releases when they get home.
The People are watching fewer channels, but they're choosing their channels from a much larger pool.
That hustle to become a top dog in the viewer selection race has shaken the M&E (media & entertainment) industry to its very core.
It's a poorly kept secret that FAANG (Facebook, Amazon, Apple, Netflix, Google) and BAT (Baidu, Alibaba, Tencent) are in town (that's Hollywood for the non-glams) and are determined to take the best talent from the networks/studios to build their title inventories quickly.
They haven't been shy about their commitment to dominate tomorrow's viewing with big, multi-year contracts.
Folks like Ryan Murphy, Reese Weatherspoon, Jennifer Aniston, Shonda Rhimes, Todd Haynes, Richard Linklater, Jill Soloway, David Letterman, Chris Rock, Jerry Seinfeld, Jennifer Salke, Steven Spielberg, Elizabeth Olsen and other name players have signed on with FAANG and BAT firms.
Talent agents are being prodded to get their clients in front of the right people!
To constantly feed their growing global subscriber base, Netflix will spend $8 billion this year on programming.
Amazon will invest $4.5 billion, Hulu $2.5 billion and $1 billion for Apple.
Disney responded by pulling its programs from Netflix and will roll out its own paid streaming service later this year.
Of course, Igor is keeping all of his options open:
Offering $52B to acquire most of 21st Century Fox
Planning an ESPN streaming channel
Investing about $15B in programming this year
VOD Opportunities - TV and content development/production organizations view the growing streaming audience as a way to attract more viewers to their unique content whether on a subscription or ad-supported basis.
Peter Rice, Fox president, isn't overly impressed with the Netflix programming budget, noting that it's a reasonable sum for someone trying to compete.
Look at the expanse of Hollywood, Rice said. Maybe Netflix is spending 10 percent of the overall content spend of Hollywood. That's not a monopoly.
Still, we know a lot of folks who want to see their titles added to the FAANG/BAT lists.
To offset the loss of hit shows and talent to streaming companies, network and cable companies are focusing on what they do best - live events (news, sports, awards) - and leveraging them across all channels.
The best example of the shift to cover all of their bases is NBC's $12B investment in the TV, mobile, internet streaming rights to the Olympic Games through 2032.
Even with a decrease in the number of people watching the Games and $900M of ads on NBC and its cable nets, the TV viewing will still beat out it's on-air competition over the 18 nights by a huge margin.
They've been streaming coverage of every Olympic event since the 2012 Summer Games in London.
Every two years, they've seen a major growth in their online audience.
And every year, the streamers have been younger.
NBC said 76 percent of the online viewers for Pyeongchang are between the ages of 18 to 49, up from 61 percent for the 2016 Summer Games in Rio when the median age was 52.
This year, NBC changed the Olympics viewing rules by streaming live coverage in prime time when the most viewers are available to watch at home.
When the games end, they don't care how you watched - smart phone; tablet; internet-connected streaming device such as Amazon Fire, Roku; smart TV or their regular network.
That wasn't possible in in previous Olympics because of time zone differences.
While we stuck with the big screen, the kids went cross-platform - iPhone, iPad, TV.
As with Rio, we had a
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Streaming Services and the Olympics Highlight Viewing Trends posted: 24/02/2018 
