Forecast: Digital Video Viewing to Top Traditional TV in US

A Netflix logo is pictured in Los Angeles, California, US, September 15, 2022. (Reuters)
A Netflix logo is pictured in Los Angeles, California, US, September 15, 2022. (Reuters)
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Forecast: Digital Video Viewing to Top Traditional TV in US

A Netflix logo is pictured in Los Angeles, California, US, September 15, 2022. (Reuters)
A Netflix logo is pictured in Los Angeles, California, US, September 15, 2022. (Reuters)

For the first time ever, US adults will spend more time this year watching digital video on platforms such as Netflix, TikTok and YouTube than viewing traditional television, Insider Intelligence forecast on Wednesday.

In the historic first, the market tracker expects "linear TV" to account for less than half of daily viewing, dropping to under three hours while average daily digital video watching climbs to 52.3 percent with 3 hours and 11 minutes.

"This milestone is driven by people spending more and more time watching video on their biggest and smallest screens, whether it's an immersive drama on a connected TV or a viral clip on a smartphone," Insider Intelligence principal analyst Paul Verna said in a release.

"Given teens' preferences for social and streaming video over TV, we can expect these trends to continue to shift in favor of digital."

Netflix and YouTube are "neck and neck" leaders when it comes to digital video audience attention, with US adults tuning in for about 33 minutes daily on average at each platform, according to Insider Intelligence.

Live sporting events becoming available on video streaming platforms is also helping power the shift away from traditional television, as is the popularity of shared video clips on apps, the market tracker said.

TikTok is a key driver with the average amount of time spent there daily by US adults climbing sharply, according to Insider Intelligence.

"TikTok versus Netflix will be a major trend to watch this year," said Insider Intelligence principal analyst Jasmine Enberg.

"The lines between social and entertainment have blurred, and TikTok is now coming for the bigger-screen video players."

TikTok CEO Shou Zi Chew will testify in March before US lawmakers in Washington, where the Chinese social media app faces accusations that it is beholden to the Communist Party in Beijing.

TikTok, whose parent company ByteDance is Chinese, is fighting for survival in the United States with rising calls from mainly Republican lawmakers that the company should be outright banned because of its alleged links to Beijing.

Insider Intelligence noted that while Twitter is not primarily a video platform, overall time spent on the platform by US adults is expected to drop this year and next year as its ranks of users decline.

"The problem is that Twitter's efforts to encourage more original videos, from Vine to Fleets, have so far been unsuccessful," Enberg said.

"Twitter owner Elon Musk's attempts to bring more video to the app, including potentially incentivizing YouTube creators to post to Twitter, will be futile at improving time spent among all US adults unless he also manages to stave off a user decline."



Netflix Shares Rise as Rosy Outlook Calms Investors’ Nerves amid Tariff Fears

In this Nov. 4, 2017, file photo, the logo of entertainment company Netflix is pictured in Paris. (AP)
In this Nov. 4, 2017, file photo, the logo of entertainment company Netflix is pictured in Paris. (AP)
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Netflix Shares Rise as Rosy Outlook Calms Investors’ Nerves amid Tariff Fears

In this Nov. 4, 2017, file photo, the logo of entertainment company Netflix is pictured in Paris. (AP)
In this Nov. 4, 2017, file photo, the logo of entertainment company Netflix is pictured in Paris. (AP)

Netflix shares rose about 3% in premarket trading on Monday as the streaming giant's upbeat annual revenue outlook reassured investors that it could withstand any economic downturn amid a tariff laden economic climate.

The company's co-CEO Greg Peters noted that the entertainment sector, and Netflix specifically, had proven resilient during previous downturns.

Peters said they had not seen any significant shifts in customer behavior, after the company reported first-quarter earnings above analysts' expectations on Thursday.

Netflix also reaffirmed its 2025 revenue forecast of between $43.5 billion and $44.5 billion.

These remarks offered some respite to investors who were worried that President Donald Trump's tariff policies could likely lead to a recession, forcing consumers to rein in spending on streaming services.

"Even in a global recession scenario, Netflix is likely to be highly resilient given the price-to-value of the service remains very attractive," said Jeffrey Wlodarczak, an analyst at Pivotal Research Group, who is five-star rated for both estimate accuracy and recommendation performance, as per LSEG data.

"Their advertising business should demonstrate strong growth in any scenario given its nascent state," Wlodarczak said.

The lower-priced, ad-supported tier accounted for 55% of new sign-ups in countries where it is available, Netflix said.

"While advertising is a small portion of the business today, the longer-term prospects are notably robust...while investments in ad-tech capabilities should drive healthy growth for years to come," BofA Global Research analysts said.

Earlier this month, the Wall Street Journal reported that Netflix aims to double revenue from $39 billion in 2024 and earn about $9 billion in global ad sales by 2030.

The company has upped the ante on delivering steady revenue growth as it ceased reporting subscriber data from this year, leaving Wall Street with fewer metrics to gauge its health.

Peers Walt Disney and Warner Bros Discovery shares were down under 1% each in premarket trading.

At least seven brokerages raised price target for Netflix following its results, bringing the median target to $1,147.50, according to data compiled by LSEG.