What started as a somewhat controversial theory put forth by Sanford Bernstein Research analyst Todd Juenger late last year has taken on rock-solid credibility, with the release of a research report this week tying dramatic declines in cable network programming to sharp increases in SVOD usage.
About 41 percent of U.S. consumers now subscribe to an SVOD service such as Netflix (NASDAQ: NFLX), which touts 40 million American subscribers, Nielsen's Q4 Total Audience Report concludes. SVOD usage stood at about 36 percent of U.S. homes in Q3 2014, Nielsen says.
The uptick in SVOD usage comes as cable viewing dropped off a cliff in 2014. A report released by MoffettNathanson earlier this week, titled The Bleeding Edge: A Look at Cable's Ratings Collapse, found that C3 ratings for adults age 18-49 dropped 9 percent in 2014.
"It's hard to ignore our long-held belief that technology (DVRs, VOD and SVOD) is disrupting viewer consumption of linear network programming," writes report author Michael Nathanson.
Nielsen's report found that, in Q4, adults spent just four hours and 51 minutes a day watching linear TV, down 13 minutes year-over-year.
Speaking to The Wall Street Journal, Steve Gigliotti, chief revenue officer for Scripps Networks Interactive, might have spoken for the broader programming industry while lamenting the decision to aggressively sell content to services like Netlfix.
At the time, he said, "it sounded like a good idea. Now, there are some misgivings about it."
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