Linear on the way out? Not so fast Netflix

Netflix was in the news this week with their latest earnings call. Despite losing 1M subscribers, their stock is up thanks to not losing the 2M they predicted. But their assertion that linear TV is going away is dead wrong. The choices of ad supported linear TV have never been better and millions of consumers are responding.

Bottom line... ad-supported linear TV is stronger than ever and is only getting stronger. This is true for free TV apps and, yes, especially true for the original ad-supported free TV: Local Broadcast TV

All ages and demographics watch both linear and VOD, and all watch free TV offerings with many also using Pay TV too. Back when Netflix launched by mailing DVDs, it was already clear that streaming to the home would be next. It was also clear to us that, eventually, the content owners who were happy (making $$$) to license content to Netflix, would eventually take some of the content back and stream it themselves. That is now a fact.

Here are some other facts:

44% of Viewing is Local Broadcast

Nielsen reported in January that — including web-based video/TV like YouTube, Twitch and A/SVOD like NetFlix — local broadcast channels were still 44% of all TV/video hours. This in a large part thanks to long-standing, but shrinking, V/MVPDs like Comcast-cable, Dish-satellite and YouTubeTV-streaming (PayTV1). As of ~10 years ago, antenna TV had dropped from ~95% in the 1970's to 8-9% of US homes, but it has predictably resurged as PayTV1 cord-cutters and cord-nevers have grown to over 20% of homes (and some say over 30%).

That’s a LOT of linear TV!

Linear Ad Revenue is on the Rise

Traditional linear TV ad buy total revenue has consistently grown to this day. Although the percentage of market is shrinking, targeted digital ad insertion (TDAI) is on the rise. TDAI is now being applied to local broadcasts to increase local broadcaster revenue thanks to local TV streaming platforms like Didja’s LocalBTV. Additionally, there is the sudden and mostly unpredicted growth of hundred of FAST channels and FAST apps — all of which is linear. DTC apps such as Paramount+ and others have also already added many linear channels.

People Just Wanna Watch

The success of platforms like Tik Tok that eliminate the need to pick and choose videos prove that people want to lean back and watch. We believe that up to 33% of YouTube video watching is essentially linear: sit back and just watch whatever YouTube recommends as they actively try to keep you on their platform.

New Era of Broadcast

Finally, NEXTGEN TV (née ATSC 3.0) which is being created by Sinclair Broadcast Group and other station groups will usher in a new era of even more and less expensive channels. Boasting features once the exclusive province of OTT apps such as 4K, Dolby sound, targeted ads, and interactive functionality, this will surely increase the appeal of broadcast TV to consumers and further accelerate viewership and ad revenue.

Local Broadcast TV and Linear are Healthy and Growing

So, it seems baseless to say linear or local-broadcast TV is dying. The reality is they clearly are growing. Accelerating consumer interest in ad-subsidized content only strengthens this real and significant trend. In the last few years, we have shifted from the PayTV1 cable TV era to the new "consumer choice" era. As a result, and without exception, it is in the best interests of content owners to have their content everywhere they can be presented to viewers, whether free or paid and linear or VOD. Linear TV continues to be a compelling and durable choice for content owners seeking massive audiences.

Consumers, enjoy the new era anyway you wish, it is "Hollywood's" greatest ever!



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