Study: Netflix is a major reason people don’t watch network TV

There is a growing chasm between people who watch broadcast TV and those who watch streaming shows. Consider that in 2015, Netflix subscribers watched CBS shows 42 percent less than non-subscribers. That means nearly half of Netflix subscribers have just stopped watching CBS. Netflix subscribers also watched Fox 35 percent less, ABC 32 percent less, and NBC 27 percent less.

Two reasons: no commercials, and the ability to watch whenever you want. The entire TV landscape will slowly shift to that model eventually. It’s just a question of who can unite all the stakeholders to bring an across-the-board streaming service. Apple seems well positioned, but the TV and film industries won’t let Apple do to TV and movies what they did to music.

I wish the iTunes Store rented TV episodes, like it did for about a year, from 2010 to 2011. A buck an episode; make them cheap and easy to watch, and people will flock to the iTunes Store. When Apple tried this, they priced the rentals at $2 – $3, which is too expensive for something you watch just once.

Source: Study: Netflix is a major reason people don’t watch network TV | Ars Technica

30 thoughts on “Study: Netflix is a major reason people don’t watch network TV

  1. The only reason we keep our cable subscription is live sports, and really only 2 specific sports. We have 3 or 4 primetime shows we do watch, time-shifted on the DVR of course, but could easily watch online for free. The sports industry has a lock because of longterm contracts by the leagues, and my bet is these are the last contracts for those. They are losing viewers now, even so.

    We watch Netflix often, and 2 of our favorites are British murder mystery series. We’re looking for more. Our Apple TV gets quite a workout every day!

    • Peg C, please name the two mystery shows that you like. My problem with all media providers is finding stuff I like amid the junk. Useful curating of Netflix would be a service I would pay for.

  2. The only reason we keep our cable subscription is live sports, and really only 2 specific sports. We have 3 or 4 primetime shows we do watch, time-shifted on the DVR of course, but could easily watch online for free. The sports industry has a lock because of longterm contracts by the leagues, and my bet is these are the last contracts for those. They are losing viewers now, even so.

    We watch Netflix often, and 2 of our favorites are British murder mystery series. We’re looking for more. Our Apple TV gets quite a workout every day!

    • Peg C, please name the two mystery shows that you like. My problem with all media providers is finding stuff I like amid the junk. Useful curating of Netflix would be a service I would pay for.

  3. I believe a law was just passed in Canada allowing à la carte channel ordering rather than the big, expensive package deals with tons of channels you don’t want to pay for or object to supporting for various reasons. We in the U.S. only wish we could have that.

    • I haven’t had subscription TV for a long time, because it’s not worth the cost. When I lived in France, I had satellite TV for a while (cable is rare in that country), but in the last few years, I had TV over DSL. There was a basic package with my provider, and you could order additional channels one by one, and cancel at any time (cancellation taking effect the following month), so if you did want a given channel just for a few months, you could do so. I understand that US cable providers aren’t really interested in offering that sort of solution, but if people vote with their feet, you may see something like that.

  4. I believe a law was just passed in Canada allowing à la carte channel ordering rather than the big, expensive package deals with tons of channels you don’t want to pay for or object to supporting for various reasons. We in the U.S. only wish we could have that.

    • I haven’t had subscription TV for a long time, because it’s not worth the cost. When I lived in France, I had satellite TV for a while (cable is rare in that country), but in the last few years, I had TV over DSL. There was a basic package with my provider, and you could order additional channels one by one, and cancel at any time (cancellation taking effect the following month), so if you did want a given channel just for a few months, you could do so. I understand that US cable providers aren’t really interested in offering that sort of solution, but if people vote with their feet, you may see something like that.

  5. FWIW:

    “I wish the iTunes Store rented TV episodes, like it did for about a year, from 2010 to 2011. A buck an episode; make them cheap and easy to watch, and people will flock to the iTunes Store. When Apple tried this, they priced the rentals at $2 – $3, which is too expensive for something you watch just once.”

    OK. It only lasted around 6 months, which the networks indicated was going to happen ahead of time. And the rentals were limited to just ABC and Fox. There were reasons for both those things.

    (Why ABC and Fox? Well, Steve-o was a big shareholder in Disney at the time, so they wanted to be nice to him. And Rupert Murdoch of Fox was desperate to get Apple promotional efforts behind his iPad daily newspaper.)

    In short, the rental thing didn’t happen because it MAKES NO ECONOMIC SENSE for the networks. It didn’t make the slightest bit of sense at $2-$3, and it sure as hell doesn’t make sense at $1.

    It DIDN’T stop because the price was too high for folks. It stopped because the networks had zero interest in either participating at all, or continuing after briefly currying some goodwill with Steve-o.

    There are some basic cable shows, which have MUCH smaller audiences, that you can buy during their 1st run for $3 per episode. But wouldn’t be near the going rate for network shows that have much larger audiences, if they ever decided to sell them a-la-carte.

    Netflix is cheap cuz you only get the old episodes of shows, which have incredibly less pricing power.

  6. FWIW:

    “I wish the iTunes Store rented TV episodes, like it did for about a year, from 2010 to 2011. A buck an episode; make them cheap and easy to watch, and people will flock to the iTunes Store. When Apple tried this, they priced the rentals at $2 – $3, which is too expensive for something you watch just once.”

    OK. It only lasted around 6 months, which the networks indicated was going to happen ahead of time. And the rentals were limited to just ABC and Fox. There were reasons for both those things.

    (Why ABC and Fox? Well, Steve-o was a big shareholder in Disney at the time, so they wanted to be nice to him. And Rupert Murdoch of Fox was desperate to get Apple promotional efforts behind his iPad daily newspaper.)

    In short, the rental thing didn’t happen because it MAKES NO ECONOMIC SENSE for the networks. It didn’t make the slightest bit of sense at $2-$3, and it sure as hell doesn’t make sense at $1.

    It DIDN’T stop because the price was too high for folks. It stopped because the networks had zero interest in either participating at all, or continuing after briefly currying some goodwill with Steve-o.

    There are some basic cable shows, which have MUCH smaller audiences, that you can buy during their 1st run for $3 per episode. But wouldn’t be near the going rate for network shows that have much larger audiences, if they ever decided to sell them a-la-carte.

    Netflix is cheap cuz you only get the old episodes of shows, which have incredibly less pricing power.

  7. I don’t watch because, without cable…I can’t. My antenna pulls in Fox and CBS and some local stuff. PBS I get from the their Net app. Aside from Netflix, they are the station we watch most (in deep Downton withdrawal right now..)
    If the networks made it a little easier to get them, I might watch more.

  8. I don’t watch because, without cable…I can’t. My antenna pulls in Fox and CBS and some local stuff. PBS I get from the their Net app. Aside from Netflix, they are the station we watch most (in deep Downton withdrawal right now..)
    If the networks made it a little easier to get them, I might watch more.

  9. Also:

    “Two reasons: no commercials…”

    I’m heavy into no commercials. I pretty much never see them. I’ve got an excellent TiVo DVR, and I always comskip. I refused to ever subscribe to Hulu when they had commercials, and immediately subscribed once they started a slightly higher-priced no-commercial tier. I even occasionally buy a basic cable series from Amazon to avoid the manual comskip hassle, as well as to get the full end-credits experience.

    So, from my own experience, that makes perfect sense. But my personal preferences don’t seem to generalize to the broader public.

    – Hulu reported that a pretty small fraction of customers are on the no-commercial tier. IIRC, it’s only around 15%.

    – Studies show that only about 60% of DVR users EVER skip commercials, and over 90% of total commercials are not skipped.

    So, as bizarre as it seems to me, and likely to you, commercials don’t seem a pressing concern for the large majority. And DVR’s solved the ‘watch when you want’ problem long ago. I think the REAL reason folks watch a lot of Netflix is the utterly massive catalog.

    —–

    “the TV and film industries won’t let Apple do to TV and movies what they did to music”

    Ya’ think? They genuinely studied the lessons of the music industry collapse, and they took copious notes…

    • “the utterly massive catalog…”

      I researched this for a Macworld article that will run soon. Netflix and Amazon Prime Video each have about 2,600 movies, and several hundred TV series, for a total of around 12,000 TV episodes. The catalog is so small as to be ridiculous, especially when you see that Amazon has some 50,000 movies to rent.

  10. Also:

    “Two reasons: no commercials…”

    I’m heavy into no commercials. I pretty much never see them. I’ve got an excellent TiVo DVR, and I always comskip. I refused to ever subscribe to Hulu when they had commercials, and immediately subscribed once they started a slightly higher-priced no-commercial tier. I even occasionally buy a basic cable series from Amazon to avoid the manual comskip hassle, as well as to get the full end-credits experience.

    So, from my own experience, that makes perfect sense. But my personal preferences don’t seem to generalize to the broader public.

    – Hulu reported that a pretty small fraction of customers are on the no-commercial tier. IIRC, it’s only around 15%.

    – Studies show that only about 60% of DVR users EVER skip commercials, and over 90% of total commercials are not skipped.

    So, as bizarre as it seems to me, and likely to you, commercials don’t seem a pressing concern for the large majority. And DVR’s solved the ‘watch when you want’ problem long ago. I think the REAL reason folks watch a lot of Netflix is the utterly massive catalog.

    —–

    “the TV and film industries won’t let Apple do to TV and movies what they did to music”

    Ya’ think? They genuinely studied the lessons of the music industry collapse, and they took copious notes…

    • “the utterly massive catalog…”

      I researched this for a Macworld article that will run soon. Netflix and Amazon Prime Video each have about 2,600 movies, and several hundred TV series, for a total of around 12,000 TV episodes. The catalog is so small as to be ridiculous, especially when you see that Amazon has some 50,000 movies to rent.

  11. “I don’t watch because, without cable…I can’t. My antenna pulls in Fox and CBS and some local stuff.”

    Yeah. OTA coverage since the HD transition is a national disgrace in the US. Last I checked the stats, something like 60% of the nation can get decent OTA reception.

    But from a purely mercenary point of view, without a cable sub, you’re worth a LOT less to the networks. More than half their revenue comes from cable retransmission fees, and less than half from advertising.

    • Digital OTA is quite good over here. I get all the free channels (dozens of them), and I’m in a rural area where I don’t even get cell coverage if the wind blows in the wrong direction.

      The same is true in France. When I moved to a village in the Alps in 2000, there was no TV at all; well, there were two staticky channels. So we got satellite TV. But since they introduced digital, there are far more channels, and, as I said above, you can also get TV over DSL. You won’t be able to get this in the US because of the cable companies. But, I know that in the US, digital OTA coverage is quick sketchy.

  12. “I don’t watch because, without cable…I can’t. My antenna pulls in Fox and CBS and some local stuff.”

    Yeah. OTA coverage since the HD transition is a national disgrace in the US. Last I checked the stats, something like 60% of the nation can get decent OTA reception.

    But from a purely mercenary point of view, without a cable sub, you’re worth a LOT less to the networks. More than half their revenue comes from cable retransmission fees, and less than half from advertising.

    • Digital OTA is quite good over here. I get all the free channels (dozens of them), and I’m in a rural area where I don’t even get cell coverage if the wind blows in the wrong direction.

      The same is true in France. When I moved to a village in the Alps in 2000, there was no TV at all; well, there were two staticky channels. So we got satellite TV. But since they introduced digital, there are far more channels, and, as I said above, you can also get TV over DSL. You won’t be able to get this in the US because of the cable companies. But, I know that in the US, digital OTA coverage is quick sketchy.

  13. “Netflix and Amazon Prime Video each have about 2,600 movies, and several hundred TV series, for a total of around 12,000 TV episodes. The catalog is so small as to be ridiculous…”

    IMHO, that’s pretty damn massive. Sure, there’s MORE available a-la-carte, but if one assumes most folks aren’t as choosy as me, you can watch essentially forever for one cheap all-you-can-eat price.

    (I’m picky, so I do a fair bit of a-la-carte.)

    —–

    “But, I know that in the US, digital OTA coverage is quick sketchy.”

    American Exceptionalism! USA! USA! USA!

    • You think that’s a lot? Since about 80% of what’s on Netflix, for example, is crap, that doesn’t leave much.

  14. “Netflix and Amazon Prime Video each have about 2,600 movies, and several hundred TV series, for a total of around 12,000 TV episodes. The catalog is so small as to be ridiculous…”

    IMHO, that’s pretty damn massive. Sure, there’s MORE available a-la-carte, but if one assumes most folks aren’t as choosy as me, you can watch essentially forever for one cheap all-you-can-eat price.

    (I’m picky, so I do a fair bit of a-la-carte.)

    —–

    “But, I know that in the US, digital OTA coverage is quick sketchy.”

    American Exceptionalism! USA! USA! USA!

    • You think that’s a lot? Since about 80% of what’s on Netflix, for example, is crap, that doesn’t leave much.

  15. “Since about 80% of what’s on Netflix, for example, is crap, that doesn’t leave much.”

    Like I say, it’s a mistake to generalize from our own taste to broader taste.

    I certianly wouldn’t be happy in the least with a steady diet of Netflix. In fact, I often ponder canceling Netflix, but I figure if I watch 2 or 3 movies a month it works out. So I don’t cancel. But, again, I’m a picky eater. For example, I never watch the ‘popular’ shows. The only things I EVER watch on the broadcast networks are NBA playoff games. (I watch zero other sports, but I do have an NBA fetish.) I rarely watch even basic cable stuff.

    I rent/buy a fair amount of Amazon a-la-carte TV/movies. I rent/buy some discs. I’ve got a cable sub, including multiple premium channels, that is bizarrely cheap since I’m lucky enough to live in an area with multiple wireline MSO’s that I’m able to play off one another to get a price far below the rack rate.

    I’ve got a nice 3TB TiVo DVR I keep filled to the brim, and being a TiVo, I’m able to offload extra stuff to a hard drive via Mac for later viewing thru Plex. So all things considered, I find a cable sub to be an incredible bargain.

    (Retail TiVo’s with CableCARD that work with all MSO’s is one of the few good parts of American Exceptionalism.)

    So, I’m not typical. You’re not typical. But I read a goodly number of comments from viewers who are VERY happy with a diet of only Netflix/Prime/Hulu. De gustibus non est disputandum.

  16. “Since about 80% of what’s on Netflix, for example, is crap, that doesn’t leave much.”

    Like I say, it’s a mistake to generalize from our own taste to broader taste.

    I certianly wouldn’t be happy in the least with a steady diet of Netflix. In fact, I often ponder canceling Netflix, but I figure if I watch 2 or 3 movies a month it works out. So I don’t cancel. But, again, I’m a picky eater. For example, I never watch the ‘popular’ shows. The only things I EVER watch on the broadcast networks are NBA playoff games. (I watch zero other sports, but I do have an NBA fetish.) I rarely watch even basic cable stuff.

    I rent/buy a fair amount of Amazon a-la-carte TV/movies. I rent/buy some discs. I’ve got a cable sub, including multiple premium channels, that is bizarrely cheap since I’m lucky enough to live in an area with multiple wireline MSO’s that I’m able to play off one another to get a price far below the rack rate.

    I’ve got a nice 3TB TiVo DVR I keep filled to the brim, and being a TiVo, I’m able to offload extra stuff to a hard drive via Mac for later viewing thru Plex. So all things considered, I find a cable sub to be an incredible bargain.

    (Retail TiVo’s with CableCARD that work with all MSO’s is one of the few good parts of American Exceptionalism.)

    So, I’m not typical. You’re not typical. But I read a goodly number of comments from viewers who are VERY happy with a diet of only Netflix/Prime/Hulu. De gustibus non est disputandum.

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