The Music Is Slowing

When the music starts, everyone plays. They smile, move fast, and pretend there will always be another chair.

But then the tempo changes. People start to listen, not dance.

The floor feels smaller. The air gets tight.

In business, that’s when things get interesting. Not when the music is loud, but when it starts to fade.

That’s where we are with streaming. The music is slowing, and there aren’t enough seats.

Let’s break it down into 4 big questions:
1) Where are we now?
2) Where are we heading?
3) How could this play out?
4) Who wins?

Where are we now?

Today, nine companies account for 74% of all TV viewing.

Share of TV time (Nielsen):
1) YouTube - 15%
2) Disney - 11%
3) Netflix - 10%
4) NBCUniversal - 9%
5) Paramount - 8%
6) Fox - 7%
7) WarnerBros. Discovery - 7%
8) Amazon - 4%
9) Roku Channel - 3%
10) Other - 26%

Known unknown: I assume the above data from Nielsen only focuses on the Gauge's broadcast, cable, and streaming parts.  This may be incorrect.  To compare these, I removed the “other category” and reapplied the share so everything adds up to 100%.  I used a similar methodology for Nielsen’s ad-supported Gauge.

I have grouped each company into the following:
1) Linear natives - Companies attempting to move a linear TV audience to streaming
2) Streaming natives - No linear TV with a strong foothold in streaming
3) Streaming insurgents - Trying to move mobile/social audiences to streaming

Where are we heading?

100% of TV will be streamed. The question is when?  eMarketer projects out to 2027 with a 57% / 43% split between streaming and linear, but we need a better roadmap.  

Mr.Screens in the lab: Later this quarter, I will release an update to my Streaming Decade in Four Steps framework.  Part of this update will be a year-by-year projection through 2035 for the following:
1) Reach
2) Time spent
3) Ad spend
4) Ad impressions

I developed three scenarios for time shifting to streaming:
1) Conservative - Linear loses 16% more by 2035
2) Bull - Sports and news shift hard to streaming.
3) Super Bull - The Bull scenario with streaming insurgents pulling attention away from premium TV content

How could this play out?

I mapped 12 scenarios using 3 criteria:

Criteria #1: TV time
1) Growth - Increases above the current 5h 4m per day
2) Flat - Stays where it is
3) Decline - TV time declines

Criteria #2: Competition
1) More competition - Streaming insurgents (TikTok, Meta, etc) gain ground
2) Same competition - Streaming insurgents have little impact

Criteria #3: Streaming share growth?
1) Streamers grow - As time shifts, streaming natives grow their share above their current 62%
2) Linear holds - Linear natives hold ground around 25%

The five most likely scenarios:
Scenario #1:  Streaming grows with new content from streaming insurgents.

Scenario #2: Same as #1, but total TV viewing rises.

Scenario #3: Streaming insurgents have little impact. Like a balloon leaking air, linear slowly loses share.

Scenario #4: TV time grows without streaming insurgents.  Best case for linear.

Scenario #5: TV time shrinks while streaming soars. Worst case for linear.

Who wins?

Linear natives (4): Broadcast networks stay at the table, but by 2035, they’ll share less than 20% of total viewership. All of this changes if the ban on mergers is lifted.

Streaming natives (3): YouTube, Netflix, and Amazon are clear leaders.  It is unlikely these three will retain their current share (56%), but they will continue to dominate as streaming approaches 100%.

Streaming insurgents (2): 
1) TikTok - U.S. looks like a long-term market with a focus on entertainment (addictive content)
2) Spotify - Alongside YouTube, could redefine “TV news”