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Netflix finds a home with younger and wealthier households

Netflix’s original series House of Cards, a political drama, stars Kevin Spacey as President Frank Underwood.


Netflix’s original series House of Cards, a political drama, stars Kevin Spacey as President Frank Underwood.

When a veteran industry analyst released a report last week stating that Netflix was to blame for half the decline in traditional TV viewing last year, he included a number of interesting assessments of how Netflix has changed the way we watch television.

The biggest takeaway: The Netflix effect is more pronounced in younger, more affluent households. Here is a breakdown of some of the findings from Michael Nathanson of MoffettNathanson Research. His analysis was based on a combination of metrics from the media measurement firm Nielsen, company data and proprietary research.

Is Netflix killing TV?

• The time spent streaming Netflix in the United States added up to about 6 percent of viewing hours for traditional television in 2015, up from 4 percent in 2014.

• Traditional TV viewing tumbled 3 percent in 2015, with half of that because of Netflix.

Takeaway: If you want to talk about killing and Netflix, start watching its original series House of Cards. Frank Underwood is probably doing more damage to traditional institutions. But while Netflix hasn't actually murdered conventional TV just yet, it's still a source of much distress.

Young vs. old

• CBS, the broadcaster with the oldest median age, had the biggest decline in TV viewership in Netflix homes compared with non-Netflix homes, with viewership down 42 percent in Netflix homes.

• The largest share of streaming subscribers for Netflix and other services in 2015 was among broadband households younger than 35. It is now 81 percent, up from 72 percent last year.

• The age group with the largest increase in share was 45- to 54-year-olds, which rose to 68 percent in 2015 from 55 percent in 2014.

Takeaway: For future growth in the United States, Netflix needs to focus on older audiences.

Income factor

• Sixty-four percent of households with annual incomes of at least $100,000 and broadband subscribed to a streaming service in 2015, up from 56 percent in 2014.

• Fifty-five percent of homes with household incomes less than $40,000 and broadband subscribed to a streaming service in 2015, up from 44 percent in 2014.

• About 44 percent of households with incomes of less than $40,000 do not have broadband access at all.

Takeaway: Given the high proportion of low-income households without broadband, it will probably be difficult for Netflix to expand its subscriber base among that population.

Netflix finds a home with younger and wealthier households 03/08/16 [Last modified: Tuesday, March 8, 2016 9:23pm]
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