BOTTOM LINE: New Nielsen data related to viewing of content on TV sets through the end of the 2015 including seven days of time-shifting-related playback shows generally improving trends, with decelerating declines in general for traditional TV-related viewing. At the same time, this has occurred with significant growth in consumption of content which was either not associated with traditional TV networks nor allocated to them for ratings credit. While these viewing trends have long-term implications for how content and advertising is produced, distributed and measured, over near- to medium- time horizons they should have limited effects on the amount of money spent on TV-related advertising. In that regard we note that a generally improving market – probably growing around +2% for national TV during 4Q15 – should continue as 2016 progresses.
New Nielsen data through the end of 2015 (including seven days of time-shifting-related playback) shows that during the calendar month of December, time spent with TV by adults 18-49 fell by -2.0% year-over-year. For the calendar quarter, declines amounted to -1.6%, better than weaker results for other quarters during the year. On a household basis, TV time declines were more muted at -0.5% during the month but flat year-over-year. Prime time declines were slightly worse at -2.4% for adults 18-49 and -0.8% for households during December.
Much of the measured TV-related activity was not attributable to specific TV networks, specifically in internet-connected device-based viewing (via Rokus, Apple TVs and Google Chromecasts among other devices), video game consoles (which includes games as well as TV-related content consumption over devices such as Xboxes and PlayStations) and "All Other Tuning" – a catch-all for other uuencoded viewing content, including video on demand related content that was either not encoded or structured for commercial measurement.
Internet-connected device-based viewing is the most significant new source of change in TV viewing, with consumption up by +84.5% in the quarter for adults 18-49 on a total day basis. Viewing was up by slightly more for total households, which saw a near-doubling in December. In total, internet-connected devices accounted for 5.5% of total day TV consumption for adults 18-49 during the month and 5.2% during the quarter. For all households, the figure was 3.5% during December and 3.3% during the quarter. Video game console-related activity grew by +12.4% during December for adults 18-49 and by +8.7% for households. Quarterly figures and prime time-only figures were consistent on a demographic basis. Consoles accounted for 9.0% of TV time during 4Q15 for adults 18-49, and 5.5% for all households. AOT – or "All Other Tuning" – accounted for the next most significant bucket of viewing share which is unallocated to specific networks. During the quarter AOT accounted for 5.0% of household viewing and 5.5% of adults 18-49, although this was down by -10.5% and -11.4% year-over-year, respectively. Among other factors, the result is likely at least in part a function of more VOD viewing becoming captured in commercial viewing metrics attributable to specific TV networks.
Within "traditional" TV, ad-supported cable viewing by adults 18-49 was down during prime time by -5.8% in December and by a similar amount in the quarter. This represents improved results vs. other quarters in the year. Total day viewing was slightly weaker at -6.6% during December and -6.4% during the quarter, also better vs. earlier parts of 2015. Ad-supported was down by much less on a household basis, although the improving trend over the course of the year was also evident. With English-language networks, results were somewhat more mixed relative to cable: declines during prime time for adults 18-49 were worse at -7.8% during December, but for the quarter, viewing of English-language networks by adults 18-49 were only down by -5.4% during prime time and by -2.4% on a whole day basis. On a household basis viewing declines were -3.0% during prime time but only -0.1% on a whole day basis. Importantly, little of the viewing captured here – as with little of the viewing incorporated in headline ratings figures – reflects viewing activity on PCs, tablets or mobile devices. Video viewing-related activity on these devices accounts for an incremental ~5% of total consumption based on our analyses of other Nielsen data sets, and contributes to what is likely flat or slightly positive overall viewing for professionally produced "premium" content we historically have called TV.
Critically, we argue that while these viewing trends have long-term implications for how content is produced, distributed and measured, over near- to medium- time horizons they should have limited effects on the amount of money spent on advertising on the medium. We estimate that national TV likely grew by around +2% during the quarter, although a range of other factors – new categories such as daily fantasy sports, pent-up demand from budgets not allocated earlier in the year by pre-existing advertisers and potentially frustration with issues in digital advertising around ad quality (fraud, viewability, etc.) – are probably helping on the margins. These general underlying trends appear set to continue as 2016 progresses.
FULL REPORT INCLUDING RISKS AND DISCLOSURES CAN BE FOUND HERE: TV Update 1-20-16.pdf
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