Back in April 2022, Netflix released an unusual letter to its shareholders. Alongside the news that the streaming service had lost 200,000 subscribers during the first quarter of 2022 (its first decline in subscribers in over ten years), one sentence in particular stood out:
“Streaming is winning over linear, as we predicted.”
Now, few of us who’ve recently binge-watched the likes of Stranger Things would argue with such a statement. The decline in linear TV compared to the uptake in streaming has been well documented for some time now, and it was noticeably accelerated by the Covid-19 pandemic. But still, are things really as clear cut as they seem?
Indeed, you could point out that on-demand viewing now comfortably outstrips linear TV viewing in the average UK household. In our recent report on the Future of TV, viewers reported that they spent roughly 56% of their time watching on demand services, compared to 44% watching linear TV.
So yes, streaming is ‘winning over’ more viewers, because it’s growing as a share of TV viewed.
But, there are a few caveats…
1 – The influence of broadcaster VOD
If we discount broadcaster VOD (Video On Demand) and look at subscription-based streaming specifically, the picture isn’t quite as clear. A significant proportion of the UK streaming figures will be taken up by people watching ‘linear’ shows on on demand services. Generic streaming figures should be taken with a pinch of salt.
2 – Overall hours watched
Streaming is not yet winning in terms of overall hours watched. That may sound strange to anyone who’s ever received the “are you still watching?” message on Netflix, but the figures are clear: people still spend more time watching live TV than they do streaming shows. For now, at least.
3 – Cost concerns
One of the biggest threats to the ascendency of streaming is rising costs. Infact, in our Future of TV report, we found that 75% of respondents were more inclined to cancel some streaming subscriptions as a result of the cost of living crisis. If streamers increase their prices, then they could all see a loss in subscribers.
4 – Linear lives on
One oddity of researching the TV landscape is that viewers often rarely sense that much will change. Most viewers we survey believe that their viewing behaviour will mostly be the same as it is now in a few years time, and experts tend to agree that linear TV won’t disappear anytime soon. Who knows, the ‘post-pandemic’ world may even see a revival in broadcast viewing as schedules are refreshed with new content.
So, while streaming may be winning over linear, Netflix isn’t exactly giving us the full picture.
Where you can get the full picture, however, is in our recent report on the Future of TV. Based on a specially commissioned study of over 1,000 respondents on their TV viewing habits, the report also contains contributions from some of the world’s leading academics on media.
And it’s shorter than the Stranger Things finale, too.