Smartphone video, connected TV increase penetration and usage

According to Nielsen’s Q2 2017 Comparable Metrics report, released in December 2017, the amount of time we spend watching online video increased on all connected screens over the last two years. However, the number of people using the tablet and PC to consume video declined over the same period.

Connected TV enjoys steady growth

connected device penetration and use by age groupNielsen includes streaming media players, game consoles, and connected DVD/Blu-ray players in its accounting of connected TV use. Penetration of connected televisions has increased steadily between Q2 2015 and Q2 2017. In 2015, 40.7% U.S. adults watched at least 1 minute of video on one or more of the connected TV devices. That increased to 46.9%, or 115.2 million people, in 2017.

Connected TV users also steadily increased viewing time through their device of choice. In 2015, users watched 1 hour and 4 minutes a day, increasing over 10 minutes in 2017.

Penetration of TV-connected devices is deepest among people in the age range 18 to 49 years. Millennials (18-34-year-olds) spend the most time watching video on their connected televisions.

PC Video users decline, but usage increases

Those watching at least 1 minute of video per week on their PC declined from 34.7% in 2015 to 29.1% in 2017. Video mirrors the general decline in PC usage.

However, those watching video on their PC increased their viewing sharply. In Q2 2015, PC video viewers watched about 37 minutes a day. Two years later viewing has increased to 1 hour and 6 minutes day. An impressive gain for a device that is in decline.

The PC is most popular as a video platform among the 35-49-year-olds, though a smaller number of millennials watch for longer on the device.

Smartphone reach and usage increase sharply

Those watching video on their smartphone increased from 37% in 2015 to 52% in 2017. As well, the amount of time spent watching on the device by smartphone video viewers more than doubled, to nearly 14 minutes a day in 2017.

This surprisingly strong growth is likely the result of two factors:

The re-emergence of unlimited data plans
The aggressive bundling of video services with mobile plans from operators.
Expect both these factors to continue to drive the adoption and usage of smartphone video for the rest of 2018.

People in the age range 18-49-years prefer the smartphone, though millennials watch far more than any other age group.

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15.8 Million People Watched the First Episode of Stranger Things

Nielsen released its first batch of viewership data about Netflix.

The never-before-publicly-shared data shows that the first episode of Stranger Things 2 drew a bigger audience than the Season 8 premiere of The Walking Dead, cable TV’s most-watched show a week earlier.

According to Nielsen’s SVOD Content Ratings, 15.8 million U.S. viewers watched the first episode of Stranger Things 2 over the first three days, including a whopping 11 million people in the 18-49 demo.

That puts it just above the live-plus-3 numbers for The Walking Dead Season 8 premiere on Oct. 22, which drew 15 million total viewers and 8.8 million in the demo.

The Stranger Things 2 demo viewership is also ahead of all broadcast entertainment programs in live-plus-3 (This Is Us had 5.8 million). As for total viewers, Stranger Things 2 is behind only The Big Bang Theory (16.5 million) and The Good Doctor (16.1 million), and tied with NCIS (15.8 million).

Stranger Things 2— which showcases dozens of brands in all of their ’80s glory—debuted last Friday. Over those first three days, every episode averaged more than 4 million total viewers, and more than 3 million in the demo, according to Nielsen. On Friday, 361,000 people watched all nine episodes of Stranger Things 2.

The episode breakdown over the first three days was as follows:

Chapter One: 15.8 million total viewers, 11 million 18-49
Chapter Two: 13.7 million total viewers, 9.6 million 18-49
Chapter Three: 11.6 million total viewers, 8.1 million 18-49
Chapter Four: 9.3 million total viewers, 6.6 million 18-49
Chapter Five: 8 million total viewers, 5.6 million 18-49
Chapter Six: 6.4 million total viewers, 4.5 million 18-49
Chapter Seven: 5.3 million total viewers, 3.7 million 18-49
Chapter Eight: 4.9 million total viewers, 3.4 million 18-49
Chapter Nine: 4.6 million total viewers, 3.2 million 18-49

During those first three days, the average Stranger Things 2 viewer watched 2.9 episodes of the new season.

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Nielsen Will Publicly Share Ratings for Netflix Shows

Ever since House of Cards premiered in 2013 on Netflix, the TV industry has been frustrated by the streaming service’s refusal to share ratings data for its content. Netflix ratings have become the industry’s white whale, with many companies attempting to nail down the company’s metrics, but seemingly failing to do so in any precise way.

That is finally about to change, as Nielsen says it will now be measuring, and publicly sharing, Netflix ratings data, while allowing networks and studios to finally get a sense of how the audience for the streaming service’s shows like Stranger Things, Orange Is the New Black, 13 Reasons Why and American Vandal measures up to broadcast and cable series. The company has launched SVOD Content Ratings, a syndicated service that measures content from subscription video on demand services, though out of the gate, the offering will only provide ratings for Netflix content.

Nielsen’s SVOD Content Ratings will provide clients the same ratings and demo data for Netflix’s original shows, movies and acquired content that they receive for linear TV programs, broken out both by season and by episode.

Initially, the offering will only provide ratings for Netflix content, and will be restricted to programs viewed on connected TV devices like Roku, Apple TV, video game consoles and smart TVs (which accounts for around 75 percent of SVOD viewing).

SVOD Content Ratings, which Nielsen has been testing with select clients since August, relies on data from Nielsen’s national panel, which is comprised of 44,000 households and more than 100,000 people.

Eight TV networks and production studios, including A&E, Disney-ABC, NBCUniversal, Lionsgate and Warner Bros., have already subscribed to the new service, and the company said more will be added in the coming days and weeks. “We’ve got a number of clients in various stages of subscription and evaluation,” said Brian Fuhrer, Nielsen’s svp of product leadership.

Nielsen has been measuring streaming content since 2014, but previously, studios working with Nielsen only had access to metrics about their own shows. They were also only permitted to use the data internally, which meant they couldn’t discuss it with the press or use it in negotiations. Now they’ll have access to ratings for all content measured by Nielsen.

“The question I always get is, ‘How did my program do?’ And the second question is, ‘How did it do in comparison with everybody else?’ That second key question is what we’re trying to answer,” said Fuhrer.

While the ratings metrics will be similar to what Nielsen collects for linear shows, it will take as much as three or three weeks for the data to be processed. “It’s definitely not an overnight process,” said Furher of the ratings, which will be made available each week. He added that Nielsen’s clients have said they would rather the data be accurate and complete rather than rushed, “so that’s what we’re working through to be able to do that.”

Initially, the SVOD Content Ratings will measure viewing via connected TV devices only, and the company will analyze its data approximate to how much viewing is done on mobile devices.

Hulu and other providers consistently say that around 75 percent of their viewing occurs via a connected TV device. “I wouldn’t be surprised if that was a low estimate, particularly for the high-value content,” said Fuhrer. “People like to watch content on a big, high-quality screen.”

In its infancy, SVOD Content Ratings won’t be measuring every single piece of content on Netflix. “We’re continuing to build our library, so we don’t have a comprehensive library of everything on Netflix right now,” Fuhrer said. “What we’re focusing on right now is the most-viewed assets out there. It breaks down into three categories: movies, Netflix originals and back seasons of TV.”

Netflix, which has always refused to share any ratings metrics, has tried to impede Nielsen’s measurement efforts by stripping out the company’s digital watermarks from its content.

For its SVOD Content Ratings, Nielsen captures a content’s video signature, compares that against a high-quality video signature that it holds for each program and loads that information into its crediting engines to determine viewing among its national panel.

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OTT Platforms: If Cable Networks Can’t Beat Them, It’s Time To Join ‘Em

Last month, Nielsen painted a rather alarming picture for cable networks. – by Tyler Pietz

Despite an increase in the total number of TV homes (+1%), traditional cable subscriptions have continued to decline at an accelerated pace (-3.1%), Nielsen said [PDF]. Taken in totality, this suggests a widening gap of -3.9% in cable subscription growth as a proportion of total TV homes.

VMVPD subscriptions, such as Sling TV, Playstation Vue and DirecTV Now, often dubbed skinny bundles, have grown, but at slower rate than necessary to sufficiently make up for the declines in traditional cable subscriptions.

Skinny bundles are inherently less lucrative than traditional subscriptions for distributors and networks because the smaller number of channels erodes cable network penetration on a per-subscriber basis. And since the regional monopolies, equipment rental fees and contractual lock-ins historically enjoyed by cable operators are effectively eliminated, the bundles also put downward pressure on margins due to increased competition from other providers.

This underlines the precarious position of traditional cable bundles: In an effort to address weakening demand for a highly lucrative revenue stream – traditional cable subscriptions – distributors have introduced a less lucrative one that has so far failed to close the gap in subscribers, let alone revenue.

But while the shift toward OTT content delivery (which runs through operators’ pipes) and a lax regulatory environment (which opens the door to payments from platforms to prioritize their traffic) will help operators absorb losses, networks have little to take solace in.

Cable networks have historically operated as franchisors, focusing on creating, acquiring and programming content while relegating to their affiliates – cable operators – the messy business of bundling and selling access to their content in exchange for a per-subscriber fee. This worked when consumers had little choice in the matter, but cord-cutting and shaving has become an increasingly viable option as more direct-to-consumer offerings emerge and negate the hegemony once enjoyed by operators.

This leaves cable networks with a few choices, none of which are easy or particularly attractive compared to their legacy businesses.

Do Nothing (Base Case)

If recent trends hold, the average network will see a significant erosion of its traditional subscriber base year over year for the foreseeable future. Beyond the hit to affiliate revenue, which is now the primary revenue stream for most networks, this will also endanger ad revenues as TV ad rates are predicated on reach. Lower viewership density equals fewer eyeballs to monetize and threatens the utility that networks offer to advertisers as an easy button that taps into most, if not all, households.

Realistically, the only lever that networks can pull under this scenario is to demand an increase in the fee that cable operators pay per subscription. Operators have shown an increased aversion to abetting these increases, as these costs are passed directly to the consumer, creating a vicious cycle that makes bundle economics less tenable for current subscribers.

Develop Assets That Can Stand On Their Own

Most cable networks spread their content over several channels or properties, each of which commands its own subscriber fee. Demand for lesser properties will weaken significantly in a higher-choice environment, so networks need to focus on quality-over-quantity products that can command a loyal audience in an increasingly unbundled world, even if those audiences are smaller and more niche.

Beyond the world of linear content delivery, there is great demand at companies such as Netflix, Amazon and Hulu for high-quality, creator-driven video content, such as “Breaking Bad” and “Fargo.” Licensing these shows already brings in nontrivial revenue for networks such as AMC and FX, but windowing – where they are made available six or more months after the original air date, to avoid cannibalizing live TV audiences – limits this revenue stream.

And as TV ad revenues decline with audiences, networks with the luxury of owning the rights to such coveted content should get serious about day-and-date distribution on digital platforms to fully realize the value of their content.

Create A Discrete Direct-To-Consumer Bundle

Direct-to-consumer businesses, when executed correctly, confer extraordinary benefits on their owners, particularly in the form of user data that can be utilized for serving highly targeted ads and the ability to measure viewership data with precision and granularity.

But the lift is much heavier, and the stakes are higher. A move into direct-to-consumer necessitates a type of business acumen and degree of technical and product excellence that is currently lacking at most cable networks. It will involve creating business models that networks have never battle-tested at scale.

Disney, having recently announced plans to develop its own OTT subscription service, may serve as the ultimate bellwether in this case. But with service expected to launch no earlier than the second half of 2019, the hand-wringing decisions and harsh realities of such a strategy are already rearing their ugly heads. Namely, the success of the new venture will be predicated on Disney’s willingness to pivot from revenue streams that will be more profitable in the short term but recede in the long term.

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This edition of Nielsen’s Local Watch Report focuses on news consumption. News viewing increased from 2015 to 2016 and has shown continued growth in early 2017. But growth isn’t the only good news here.

Perhaps the more astonishing fact is that local news on local broadcast TV stations is the place where people spend the most time consuming news on TV. By far, local news reaches more adults than both national broadcast network news and cable news. In fact, in an average week in the first quarter of 2017, local news reached 40% of persons 25- 54. This compares to 32% for national broadcast news and 17% for cable news. In the same time period, adults spent two hours and 22 minutes watching local news, which is more than double the amount of time spent watching national broadcast news.

Analyzing individual markets, we found that Memphis was the top Set Meter market for time spent watching local news, at three hours and 55 minutes per person per week while Cleveland was the top Local People Meter (LPM) market at three hours and 27 minutes.

We also looked at news consumption through personal digital media. Adults reached by local news on TV surpasses the reach of people consuming news on smartphones and PCs 4 to 1.


Adults in the top 25 markets are spending more than 44 billion minutes consuming news in a typical week—up 11% from full-year 2016, and 25% from full-year 2015.

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How are TV homes growing if pay TV is shrinking?

Nielsen reports that the number of TV homes has expanded to 119.6 million for the 2017-2018 season. For the 2016-2017 season, Nielsen said there were 118.4 million TV homes. Between 2011 and 2013 the number of TV homes contracted.

As televisions households continue to expand, the number of homes with pay TV continues to decline. The number of pay TV subscriptions in the U.S. has fallen from 104.1 million in 2010 to 98.7 in 2016. Two-thirds of the decline came in the four years between 2013 and 2016.

Does this mean there has been a big increase in television sales over the period? Not really. Television shipments in the U.S. have remained at about 40 million a year for the past six years. Shipments even declined a little between 2015 and 2017, from 40.2 million to 39.5 million.

So, if television sales have not increased and pay TV is declining why is the number TV homes growing and what are people watching?

What are the new TV homes watching?

The source of content for these new television homes is coming from two primary sources. The first, and perhaps biggest, group is streaming video to their TVs. Over the past three years, the penetration of enabled smart TVs has almost doubled, from 14% to 27%.~ At the same time, the number of homes using a streaming media player has increased from 18% to 29%.^

The second source of content for these new television homes is good old antenna television. Between Q1 2015 and Q1 2017, the number of homes watching television with an antenna increased from 12.5 million to 15.2 million. However, almost all the increase in antenna homes came from homes that also have broadband. In those home, it is likely people use both broadcast television and streaming services on the big screen.

Why did the number of TV homes increase?

It could be that people are just keeping their television sets a little longer. Streaming media players are a cheap way of watching streaming services on non-smart TVs. They are also a great way of getting all the latest apps on an older smart TV that may not be able to deliver a good experience with the latest apps.

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Smart TV users watch 36% less than streaming box users

Most TVs shipped in the US are smart and increasing numbers of consumers are connecting them and using them to stream video. However, will they catch up to, and overhaul, the market leading streaming media players?

Smart TVs the norm when purchasing a new set

Smart TVs are now the default choice for consumers when purchasing a new set. 70% of all televisions shipped in North America in 2016 were smart. A third of total smart TV sales have gone to Samsung, with Vizio close behind with 30%. The rest of the market is divvied up between multiple manufacturers. LG secures the third spot with 10%, Sony is next with 7%.

Smart TV and streaming media player benefiting from OTT growth

Streaming media player (SMP) and enabled smart TV penetration has grown strongly over the last four years. In Q1 2014 just 10% of TV homes had a smart TV and 15% had a streaming media player. In Q1 2017, smart TVs have narrowed the gap on SMPs as penetration has grown to 29% and 31% respectively.

Both devices growth reflects how video streaming has moved into the mainstream. Between Q1 2014 and Q1 2017, Netflix U.S. streaming subscribers have grown from 36 million to 52 million. Moreover, services like Netflix put a strong emphasis on the television as the primary viewing platform. This trend seems likely to accelerate as consumers continue to move traditional television viewing to online platforms.

So, will smart TVs continue to catch up to, and overtake, SMPs as the preferred device for online streaming? Maybe not looking at usage data.

Smart TV usage is mixed

When it comes to usage smart TVs come with a natural advantage. When the TV is turned on many smart TVs start from the devices web portal. Moreover, many smart TVs make content and app suggestions in the opening screen. These advantages impact how often an owner uses that functionality. According to Nielsen, enabled smart TVs were used on 20.8 days between December 26th, 2016 and January 29th, 2017. Game consoles were used 15.3 days and SMPs 14.9 days.

When it comes to raw viewing hours the smart TV is well behind other devices. For example, game consoles are used for 4.4 hours per day, though that usage is likely dominated by gameplay rather than video viewing. On the other hand, SMPs are used for 3.6 hours per day with most of that usage dedicated to streaming. Enabled smart TVs are used for 2.3 hours, over an hour less than devices like Roku and Apple TV.

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Nielsen to Credit Video Views on Facebook, Hulu and YouTube

Broadening its visibility into the world of digital video and OTT distribution, Nielsen said it will begin crediting video content distributed on Facebook, Hulu and YouTube.

That added capability, delivered via Nielsen’s Digital Content Ratings, will enable TV and digital publisher clients to capture viewing of their content within their reported audience numbers, Nielsen said, noting that this “consistent and transparent view ensures a level playing field” because it provides access to the same information across both publishers and platforms.
While enabled publisher clients will be able to receive credit for video offered on Facebook and YouTube in Nielsen’s Digital Content Ratings, Hulu will be providing “select media partners” with credit for current series content that it distributes, Nielsen said.

That expansion follows Nielsen’s announcement last month that “eligible TV viewing” from YouTube TV and Hulu’s new live TV service would be included in its Digital in TV Ratings.

“The inclusion of video content distributed on Facebook, Hulu and YouTube in Nielsen Digital Content Ratings is a major accomplishment and part of our ongoing commitment to providing the industry with independent, comprehensive measurement of the evolving consumer landscape,” Megan Clarken, president of product leadership at Nielsen, said in a statement. “Through capturing this audience, Nielsen is providing publishers, agencies and advertisers with a better picture of today’s media consumption, with comparable metrics.”

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Nielsen Launches Measurement for Mobile Ads on YouTube App

Nielsen said it has begun measuring the advertising appearing on YouTube’s mobile app.

YouTube viewing on desktops and mobile web browsers was previously measured by Nielsen, but with mobile usage growing into a dominant position, adding the app was important to getting an accurate picture of consumer behavior.

Nielsen Digital Ad Ratings clients will be able to get age and gender demographics for viewers on the YouTube mobile app, plus reach, frequency and gross ratings points.

“As more people watch video across digital platforms and devices, Nielsen’s comprehensive measurement of YouTube through Digital Ad Ratings is crucial to provide a complete picture of media consumption,” said David Wong, senior VP of digital product leadership at Nielsen. “We are proud to be able to provide the market with an independent view of the audience for advertising on YouTube in context of the wider viewing landscape.”

Measuring ads on the YouTube app also helps producers of content for YouTube channels.

“With the ongoing shift of TV dollars to digital, and specifically mobile video, top brands and agencies are aggressively moving toward more measurable reach,” said Tariq Abouddafar, head of ad platforms at Tastemade. “Nielsen’s ability to measure reach, frequency and GRP on YouTube mobile is a game changer as it allows us to expand our measurable YouTube inventory and audience guarantee, against Nielsen ratings.”

ComScore Now Shows Advertisers Who’s Watching Their Content

For a while now, those in the television industry have been clamoring for viewership data on people watching content on streaming services, including Amazon, Hulu and Netflix. And it appears measurement firm comScore, which has been nipping at Nielsen’s heels for some time, is attempting to step up to the plate.

According to Fierce Cable, comScore is promising viewership data for streaming content on TV screens through a new service called OTT Intelligence. The data is gathered through comScore’s Total Home Panel, a platform that has access to audience statistics based on approximately 12,500 households and 150,000 active devices.

Subscribers to OTT Intelligence will have access to metrics including household reach, audience size and usage for the aforementioned streaming services as well as YouTube. The company said the data can be segmented for cord-cutting and cord-never homes as well as those with a cable or satellite subscriptions.

“With very limited insight into viewing behavior across providers, the OTT market has largely been a black box,” said Mike Rich, comScore vp of emerging products, in a statement. “As more TV viewers look beyond traditional content sources, it’s more important than ever for networks, content producers, device manufacturers and others in the ecosystem to understand this growing segment of cross-platform viewing.”

Streaming services like Netflix and Amazon occasionally provide updates about their total number of subscribers, but they’re traditionally far vaguer when it comes to releasing viewership data for their original content.

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