PORTLAND, Ore. (TheStreet) – Unless you really want to get into a show that no one's watching, feel free to sit out the earliest parts of the fall television season.
The marketing and hype behind television's fall premiere season would lead you to believe that catching television shows just as they hatch is vitally important to networks, the shows themselves and the entire television viewing experience. As viewers have shifted their watching schedules with the help of DVRs and binge-watched streaming video services, however, networks have learned to be slightly more patient before giving new programs the hook.
A survey released last year by Harris Interactive discovered that 78% of Americans have watched TV “on [their] own schedule,” and 62% of those have binge-watched multiple episodes of a TV show at a time. Of that audience, 41% of Americans have watched TV on demand through a cable provider (34%) or a satellite provider (9%). Another 40% use Hulu Plus, Netflix or Amazon to do the same, while 37% take to their Tivo, DVR or other recording device to watch television when they feel like it.
That's creating a fundamental shift in not only how shows are aired, but how networks and advertisers approach the television season. On the surface, it's ugly. Morgan Stanley analyst Benjamin Swinburne last year published a report indicating that, since 2002, the average Nielsen rating for broadcast television among viewer 18-49 collapsed from 15 to roughly 7 in 2011. At the same time, average advertising revenue for those broadcasts decreased only 6% to 7%, as networks still held on to a larger single audience than any other alternative.
It's also becoming clear that the companies behind those networks -- 20th Century Fox, Comcast, Disney and, to a lesser extent, CBS — are relying on subscription fees as a growing portion of their overall revenue while minimizing the risk of fluctuating ad dollars. By 2011, the split between ad revenue and subscription revenue among television companies was roughly 60% to 40%, with Swinburne estimating that combined revenues would climb from $95 billion in 2012 to $115 billion by 2015.
That's changing the television landscape from a seasonal business to a year-round affair: An endless loop of fresh content that viewers can access at just about any time. When broadcast networks would cancel shows including Family Guy and Futurama, cable would sweep in, revive them and make them commercially viable again. Now, when broadcast and cable networks cancel shows such as Arrested Development, Community or The Killing, online streaming services including Netflix and Yahoo! Screen swoop in to pick them up.
As it turns out, viewers — especially young viewers — really like watching television on their own terms. Nielsen discovered back in 2012 that time-shifted viewing using Tivo, DVRs and on-demand services rose from just five hours of average monthly viewing in 2007 to 11 hours by the end of 2011. Online viewing, meanwhile, rose from little less than two hours per month in 2006 to nearly 7 hours by 2012.