Rising costs are biting into the profits of numerous companies. People are fast cutting down on luxuries and spending cautiously on necessities. This has led to several streaming giants losing subscribers. However, online streaming has managed to hold on to its ground. In doing so, streaming viewership for the first time surpassed cable TV in the United States in July.
While the war between streaming giants has intensified over the years, a different war with cable TV networks has seen OTT platforms emerge winners. Streaming giants are already facing several obstacles due to soaring prices and now have a new challenge of maintaining a lead with cable TVs.
New High for Streaming Platforms
Streaming viewership in the United States reached a new high in July. According to a new report from Nielsen, online streaming took over cable usage in the United States in July. According to the report, online streaming accounted for 34.8% of total TV viewing in July, while cable TV made up 34.4% of total viewing.
On a year-over-year basis, online streaming on television jumped 22.6%, while cable TV consumption declined 8.9% year over year and 2% month over month.
Streaming had been outperforming broadcast viewing for a while now, with broadcast volume further declining 3.7% in July on a month-over-month basis. According to the report, 21.6% of TV viewing was made up of broadcasts.
Although only marginally high, this is the first time that streaming services have exceeded Cable TV viewing. At the same time, it proves that viewers are slowly giving up on watching cable TV as streaming giants continue to grow with their big bouquet of shows.
Nielsen also cited that the “slowdown of new content on traditional television and reduced sports programming” is responsible for this drift toward online streaming, where there is more variety on offer.
The report also mentioned that major players like Netflix. Inc. NFLX, Alphabet, Inc.’s GOOGL YouTube, Hulu, Amazon.com, Inc.’s AMZN Amazon Prime, The Walt Disney Company’s DIS Discoevry+ and Warner Bros. Discovery, Inc.’s WBD HBO are all contributing to the jump in streaming viewership in July.
Big Players Surviving Challenges
Streaming giants are facing several challenges but have not succumbed to inflationary pressure. Netflix last month reported that the company last lost close to a million subscribers in the second quarter. This was the second consecutive quarter that NFLX lost such a huge number of subscribers, but the company also said that it had expected a higher number as people are cutting on luxuries owing to higher costs of goods and services.
On the other hand, Disney+ added 14.4 million during the April-June period. DIS now boasts a whopping 152.1 million subscribers.
According to the Nielsen report, despite Netflix suffering a decline in subscribers, the company led the overall online streaming usage with 8% of total viewership. The high viewership was driven by NFLX’s Stranger Things, which accounted for 18 billion minutes of viewing. Other Netflix shows that helped the company in attaining the No.1 position were The Umbrella Academy and The Boys.
Alphabet’s YouTube took the second position with 7.3%, while Hulu was in the third place, with 3.6% share.
Amazon.com’s Amazon Prime Video came in fourth at 3%. AMZN’s two major shows The Terminal List and new episodes of The Boys, together accounted for 133 million hours of viewing in July.
Despite adding a record number of subscribers, Disney+ slipped to the fifth spot. DIS accounted for just 1.8% of the total online streaming on television. The Walt Disney Company has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Although streaming giants have lately been feeling the inflationary pressures, it goes without saying that cable TV is fast losing its sheen.
Nielsen also reported that it would record the highest volume of streaming weeks in July. In July, streamers watched content for a record 190.9 billion minutes, on average, per week. The last time Nielsen measured an all-time high, it was during the Christmas week in 2021, with 183 billion streaming minutes.
This shows the growing shift toward online streaming as cable TV continues to struggle in terms of content. Streaming services can only gain from here.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Netflix, Inc. (NFLX) : Free Stock Analysis Report
The Walt Disney Company (DIS) : Free Stock Analysis Report
Warner Bros. Discovery, Inc. (WBD) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research