Dive Brief:
- CordCutting.com broke down stats on Netflix and Nielsen cable viewing and found that the average Netflix viewer misses out on seeing 160 hours of ads each year.
- This compares to similar research by Exstreamist from last summer that determined Netflix users were avoiding 130 hours of ads each year.
- CordCutting also pointed out that its regression analysis was based on hours of viewing and not hours of content, stating, “In a given hour of viewing, Netflix subscribers don’t just see 15 minutes, 38 seconds fewer of commercials than cable TV subscribers – they also see 15 minutes, 38 seconds more of whatever they’re actually watching.”
Dive Insight:
The author of the CordCutting article notes that while these findings don't have a direct impact for sports and other appointment viewing programs, they do shed light on the state of the ad industry overall. Though the findings don't address the increase in consumers using ad blocking software, they do serve as a reminder that consumers who are fed up with ads have real options to avoid them.
"It’s clear that Netflix’s commercial-free model is making a huge impact on the industry and on the ad consumption of its subscribers. And, according to our calculations, Netflix’s impact on the advertising world is only becoming greater," the author of the article writes.
Although the phenomena of TV ad dollars moving to digital video ads wasn’t mentioned in the report, the findings do illustrate the challenge facing the traditional TV advertising model. Viewers have many more options beyond linear TV today – streaming versions of content that originally appeared on broadcast or cable TV, streaming services like Netflix, highly polished YouTube content, and more. The new push for live streaming video on Facebook, Twitter and other non-traditional outlets are even taking a seat at the appointment viewing table. The NFL’s deal with Twitter to live-stream professional football next season is just a sign of the times.
What does all this mean for marketers? TV advertising isn’t going away, but audiences are becoming more and more scattered and better equipped with options to watch programs when and how they want. That will been ad budgets will have to be redrawn so that ad dollars are being spent based on where viewers choose to watch shows, regardless of what screens they're using.