It’s the worst kept secret that Netflix has changed the game of television, both on the side of the networks and on the side of the viewers. As TV viewers become more acclimated to binge-watching, on-demand, anytime scheduling, the major U.S. networks have scrambled to keep up by phasing out repeats, having year-round schedules of new programs, and, like a recent move by NBC, posting all episodes of a series to stream instantly. Given all that, and the ease and access of Netflix business model, observers are now saying that in just over a year, Netflix will have more viewers than NBC, ABC, CBS and Fox.
Variety got a hold of a report from an outfit called FBR Capital Markets, a Wall Street-based analysis group. In it, their expert analysis reveals that by 2016, if Netflix were rated like the other TV networks by Nielsen, then it would have more viewers on a per 24 hour basis than the big four major U.S. broadcasters.
There maybe some flaws in this methodologically. For instance, Netflix doesn’t release ratings, it’s not part of the Nielsens, and they don’t sell ad time so there’s no need for them to ever provide ratings for how well their programs, even their original series, are watched in order to set ad rates. Also, the amount of content on Netflix pails in comparison to the average network, and covers a wide-range of different programming. Meanwhile, Nielsen only covers the week of ratings for live-viewing and DVR, and not the viewing stats of their TV shows on Hulu or their own streaming sites.
So the conclusions that FBR Capital Markets has come to is not exact, and the company itself says that their findings are meant to “be a barometer of the relative popularity of Netflix to traditional TV.” So how did they come to this conclusion?
Netflix said users streamed about 10 billion hours of video in Q1 2015, equating to nearly two hours per subscriber per day. The FBR analysts calculated what Netflix’s Nielsen rating would be by dividing the two-hour figure by 24 hours, then multiplying that by the number of Netflix U.S. subs as a percentage of households.
So it’s a report not completely scientific, but it should have some pretty major concerns for the U.S. broadcast networks. How can they compete with the Netflixes, Amazons, and Hulus of the world as the number of subscribers to those sites seems to keep going up? That’s the very tough question before those network boardrooms as we speak.