As Nielsen reports shift away from cable TV Netflix announces biggest price hike

A recent Nielsen report on the evolution of US TV viewing habits reveals a 48% increase in the number of households switching entirely to over the air access.

16 million US homes – 14% of households – are now OTA-only, up from just 9% of households 8 years ago. This constituency is split into older viewers (6.6m) looking to save a few bucks by settling for the good, old broadcast antenna option, and younger SVOD (subscription video on demand) subscribers (9.4m), who get everything they need from services like Netflix and therefore see no need to pay for cable.

A significant characteristic of this latter category is a move away from the traditional TV to viewing on mobile devices. These smaller screens tend to lend themselves to solitary viewing rather than the more communal TV experience, something that is greatly facilitated by the on-demand nature of these services.

Nielsen OTA chart

Coinciding with the publication of this report is the announcement from Netflix of its biggest ever price rise in the US. The SVOD giant has been investing more than ever on original programming and has such a massive installed base that it seems to have decided it’s time to start thinking about justifying its massive valuation.

“We change pricing from time to time as we continue investing in great entertainment and improving the overall Netflix experience for the benefit of our members,” a Netflix spokesperson said in a somewhat redundant statement to Light Reading.

“For many users, Netflix is an indispensable video services,” said Tech, Media & Telco Analyst Paolo Pescatore. “There will not be much backlash (for now). This is certainly one way to increase revenue significantly. It needs to focus on financials as well as subscriber growth. Netflix is following the traditional pay TV model of increasing prices annually. Expect other countries to increase prices over coming months.”

Anecdotally linear TV viewing seems to be a dying phenomenon. Even when families congregate around the living room TV they’re just as likely to watch a DVD or streamed box set and, if this correspondent’s experience is anything to go by, people prefer to do their own thing on tablets. Netflix is currently the boss of that sector so it’s probably free to keep raising prices for a while yet.

Omnichannel is a real thing after all – Nielsen

It is becoming increasingly difficult to capture the attention of customers nowadays, but short-attention spans and multiple screens might turn out to be an advantage.

Omnichannel marketing and experiences are up there with the buzziest of buzzwords, and while some might believe it is nothing more than a consultant’s invention to justify their existence, there might be some substance to it after all.

According to the most recent Nielsen Total Audience Report, more US adults are engaging content on multiple devices simultaneously. In fact, 45% responded to the survey stating they always or very often have a second device on the go while watching TV. This might sound like a disaster for cash-conscious marketers, though the savvy ones could use it to their advantage.

In terms of what people are doing on the second device, 71% said it was related to what had been viewed on the TV, 41% were messaging friends or family about the content, while 35% said they were looking up a product or service which had been advertised on TV. It is very difficult to link TV advertising back to direct opportunities and revenues, though this research suggests there is some credibility to this omnichannel buzz.

And despite smartphones and tablets evolving to mini-cinema screens with their image quality, the TV is still king.

Nielsen Graph

While the smartphone and other digital devices are clearly having more of an impact on our habits, these trends have not been prominent enough to drag us away from the TV in the living room. Some marketers might prefer the more accountable digital routes to reach customers, but the TV is proving to still be one of the most effective ways to get the message across.

It also suggests that while the landscape is rapidly shifting and evolving, some things never change; 9pm is still the best time to get your brand in front of the consumer.

It does seem there might be some credibility to this omnichannel engagement strategy; sometimes the marketing consultants do get it right, even if it is slightly unpalatable to say.