The number of pay-TV households experienced a small decline in the fourth quarter, dropping below the 100 million mark. Penetration of subscription video-on-demand services including Netflix increased.
According to a new Total Audience Report from Nielsen, there were 99.44 million cable plus households, which includes wired cable, telco and satellite subscribers, in the fourth quarter of 2015, compared to just over 100 million in the third quarter and 100.93 million a year ago.
Media companies and Wall Street have been closely watching the decline in the number of pay-TV households because fewer pay-TV subscribers mean slower growth in distribution revenue for cable networks, which have been huge profit generators.
Some of the decline in pay-TV subscriptions has been blamed on younger consumers, who either can’t afford the traditional large bundle of cable network programming offered by operators or are choosing to get their entertainment online and on demand.
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Live linear TV viewing dropped but more slowly than in past quarters. Time spent with live TV was 4 hours and 27 minutes per day, down 1.2% from 4:31 a year ago when it dropped 5.6%. Time-shifted TV rose to 32 minutes in the fourth quarter from 31 minutes a year ago.
Usage of apps and the web on smartphones continued to grow, hitting 1:12 in the fourth quarter, up from 58 minutes a year ago and 41 minutes two years ago.
A streaming SVOD service was in 48% of households in the fourth quarter, according to Nelsen, up from 46% in the third quarter and 41% a year ago.
Nielsen took a closer look at millennial viewing habits as part of its fourth-quarter report.
“Nielsen's comprehensive information on our panelists allows us to divide persons 18-34 into three life stage groups – those living in someone else’s home, those living in their own home without children, and those living in their own home with children,” said Glenn Enoch, senior VP, audience insights at Nielsen, and author of the report.
The percentage of millennials changes as they get older with 97% of 18-year-olds living in someone else’s home, 90% of 34-year-olds living in their own homes, about 60% of them with children.
The living at home group, dubbed by Nielsen as “dependent adults” were the youngest (average age 23.1) but had the highest median household income ($64,100)—because of the other adults they live with. The “on their own” group averaged 27.3 years old and household income of $53,400, while the “starting a family” segment averaged 29.5 years old and $48,800 in income.
On their own, millennials are the most likely to have high-speed internet service and are by far the most likely to have multimedia devices and access to an SVOD service. Where they have a PC, it is most likely a laptop, the report says
Starting a family, millennials are the least likely to have broadband and SVOD, according to Nielsen. This may reflect lower income status or be due to lower availability in towns and rural areas. They are more likely than the on their own group to have a DVR and also more likely to have a DVD, but they are the least likely to have multimedia devices. This group has the lowest penetration of PCs, but the second-highest ownership of tablets, after dependent adults.
The availability of these technologies and services to Dependent Adult millennials is partly the result of choices by an older, higher-income adult. Older adults are heavier users of DVRs, so these dependent adult millennials have the greatest access to DVRs, the report says.
Among all 18-to-34-year-olds TV screen usage was 4 hours and 8 minutes per day, including 2:45 of live TV and 1:23 of TV-connected device usage. The starting a family group spent the most time in front of a screen at 4:40, including 3:16 of live TV. The on their own group spent the least time in front of a screen, with 3:38 in usage including 2:06 of live TV consumptions, but the most time with connected devices, at 1:32. The dependent adult had 3:44 in screen time, including 2:32 of live TV.
The on-their-own group also spent the most time using digital devices—PCs, smart phones and tablets. The on-their-own group and the starting a family group each spent 12.8 hours watching digital video during November 2015, while dependent adults spent 12.4 hours with digital video.
According to the report, broadcast only homes rose to 13.09 million in the fourth quarter from 12.35 million a year ago. Broadband only homes rose to 3.87 million homes from 3.13 million.
Wired cable homes fell to 51.97 million homes in the fourth quarter from 53.35 million a year ago. Telco homes fell to 51.97 million homes from 53.35. Satellite homes dipped to 34.46 million homes from 34.43 million.
