According to the latest IPA TouchPoints survey, Netflix has increased its viewership by almost half (45%) in the past year alone. As a result, the platform is now the sixth most watched channel for adults, behind only the big names of BBC One, ITV, Channel 4, BBC Two and Channel 5.
Netflix’s business model centres around the user’s journey, understanding people’s habits and the types of shows they like to watch – and arguably has normalised the phenomenon of ‘binge-watching’, or boxset viewing. Amongst younger viewers in particular, some are arguing that binge-watching may come to replace ‘event television’ – though with notable exceptions. See Bodyguard, for example, which pulled in an average of 10.4m viewers on BBC One, and peaking at 11.0m, for its last episode.
More people than ever are choosing to consume content through over-the-top (OTT) services like Netflix – 55% of British households connect their TV to the internet while a third of households own a service subscription (Parks & Associates Connected Consumer Report 2017). Smart televisions are also enabling this shift in behaviour, by offering built-in streaming services so users can watch what they want on demand.
As a result, there’s also been a rise in ‘cord cutting’ – the practice of cancelling or forgoing a pay television subscription in favour of an alternative internet-based service.
For example, Sky is choosing not to directly compete but instead make Netflix content available on Sky Q from November to its premium subscribers. The deal means Sky Box sets, which include 400 UK and US series and the full Netflix service will be available for the first time in a single on-demand service.
This is not the first time a TV provider has integrated with an on-demand service, as Virgin did just this with Netflix in 2013 leading to Netflix becoming Virgin’s fourth biggest channel.
Younger people are consuming television media differently by streaming more – 16-34s are reportedly watching a further 12% of content on subscription services versus all individuals (BARB).
By brokering a deal with Netflix, Sky will appeal to this younger audience. Andrew McIntosh, the head of TV analysis at Enders Analysis has said of the move “Sky is making sure that younger people in the household are becoming as familiar with Sky as older people”. Though Sky are open to an affiliation with Netflix, Comcast’s $40 billion takeover deal also creates leverage for the broadcaster to create new content to rival subscription services.
While it’s not yet the death knell for TV, broadcasters are acknowledging that streaming services and on-demand platforms have at least started to shift viewing habits, especially amongst a younger generation.
The broadcasters may, finally, have come to realise that the likes of Netflix could even become an ally – rather than an enemy – in the war on video content.
