Thursday Thought: Gauging Around

My mother loved my newsletter from Tuesday.

I hope you all did too.

She said it was more relatable than the others.

The others where I get into “hard marketing.”

That’s what today’s newsletter is. Hard marketing.

We’ll be digesting Nielsen’s new The Gauge report.

And sharing what it means for ad-supported video moving forward.

Shout out to all of you for reading this.

Shout out to my wife and new child for allowing me a few minutes to write this.

Let’s go!

Thursday Thought

Nielsen came out with their new The Gauge report recently.

In it, it breaks down TV time spent for broadcast TV, cable TV, and streaming for September.

Lots of interesting takeaways from the report.

Here are the ones that caught my eye.

Before getting into it, there are plenty of people who analyze these reports.

Some of the best include Ben Thompson and Evan Shapiro.

What I write is inspired by them, so please follow and subscribe to their stuff.

Here are 10 takeaways:

1. In July, the media press made a huge deal about how TV time spent per Nielsen, for the first time ever, dipped below 50%. Savvy industry observers at the time though noted why - it was seasonal. Not only was there a strike, but all major sports were off-air. TV had dipped the summer before as well, just not below 50%. Well, lo and behold, TV is back up over 50%, because of the return of the NFL and college football. But you won’t see any capitulations or references to TV’s fall reemergence from marketing publications; it’s not a great headline. So, a reminder to everyone about the “numbers and the narrative” - there are the numbers, and then there is the narrative people twist numbers into to convey the point they want to get across.

2. It seems that Netflix and YouTube are early strike winners. Their time spent ballooned in the summer. Netflix time spent in August was up 19% from April, while YouTube was up 12% - made even more impressive by the fact that time spent in these 2 places were already 2-2.5x higher than the next highest streamers. Deep catalogues - both premium and user-generated - are what people seek out when there is nothing else on. Netflix and YouTube offered each side of the equation.

3. Netflix announced yesterday a big jump in subscribers - 8.8 million for Q3, 1.8 million of which were in the U.S. - a region they have continued to struggle to gain incremental subscribers. That, plus the jump in TV time this summer / fall, shows Netflix is as sticky as ever - they are both gaining users AND time spent among them. It’s a good sign for their future amidst price hikes and password crackdowns, but it will be interesting to see what happens once the strike ends. My hunch is it won’t matter - Netflix is running up the score with content off-air, and is only losing time spent during sports windows.

4. Speaking of Netflix, and separate from the Nielsen report, they had some big announcements on the advertising tier. Their ad tier continues to be lackluster - the scale is shallow - but they have signed some big name advertisers to top sponsorship opportunities. For example, Frito-Lay has signed on to sponsor the next season of Love Is Blind on Netflix’s ad-supported tier. These types of opportunities typically are not cheap - I’d be surprised if it costs less than $500k, and is likely 7 figures. So, don’t be surprised if Love Is Blind’s next season premiere lines up with a big password crackdown from Netflix - now that they’ve made some big promises to advertisers, and have big commitments in turn, Netflix needs to start showing some scale and momentum against their ad tier.

5. Amazon Prime saw a 7.5% viewership jump in September with Thursday Night Football. And it’s hard not to read that as…that’s it? They are paying $1 billion per year for these rights, or, when amortized to the length of the NFL season, $33 million for each September percentage point uptick in TV time. The NFL is the pinnacle of sports rights, so it’s unlikely that a deal with the NBA or other leagues will offer Amazon more viewership (though the NBA has more games each week, and it’s possible a package of NBA games coupled with TNF rises Amazon overall usage as a one-stop shop destination for content). Not sure what I expected the number to be, but just seems a little low - and it’s not like the Thursday night games are going to get any better as the season goes on. So, September might be Amazon Prime’s best month of the year in terms of viewership, which doesn’t portend well given they are set to debut ads on Prime in a few months and will need to show momentum to get advertisers to sign on.

6. Disney+ is operating at an anemic level. Whereas YouTube and Netflix time spent surged during the summer, Disney+ held flat at 2%. Some of that might have to do with kids being out of school, and watching less, and Disney+ being more adversely affected by that (though YouTube and Netflix would presumably feel those effects as well). Some of it might have to do with a lack of stellar content being released by Disney+ and general Marvel / Star Wars fatigue. Some of it might have to do with Disney+ content being consumed more on-the-go on tablets and phones by children than on the TV screen (I’m not sure how Nielsen calculates other device usage in this report, so this may or may not be a factor). Nevertheless, it’s embarassing. Disney+ is a distant 5th among all streamers in time spent, and it’s no wonder why Bob Iger now has to fight for Hulu from Comcast to keep any sort of streaming ambitions alive for the company. If I’m an advertiser looking at potential ad tier options, Disney+ is a hard pass until the numbers start turning around.

7. I’m curious how much, if any, impact YouTube and YouTube TV saw from NFL Sunday Ticket in September, but the report is unclear. Similarly, Apple TV+ is not broken out in Nielsen, and I’d love to get a sense for how the MLS has helped or not helped that service over the last few months. Again, the report is unclear here. If we assume Apple TV+ falls in the “other” bucket, there were no truly meaningful gains this summer. But it’s too hard to tell.

8. Tuuuuuuubi! Long-time readers of this newsletter (which is a hilarious thing to say, in and of itself) know my disdain for free ad-supported television, and how I’ve assigned Tubi as its mascot. I won’t get into all those reasons again here, but Tubi is on a roll. It had a higher TV time spent in September than “major” services like Max, Peacock, and Paramount+, and leads all FAST services including Roku Channel and Pluto TV. I don’t know what it is about Tubi that make people like it more; I have heard it’s on-demand movies is a more favorable set-up than Pluto’s never-ending list of cable-like channels. But, one thing I think is propelling Tubi’s ascent is its incredible marketing campaigns. Tubi had a beloved and acclaimed Super Bowl ad earlier this year, and just released a batch of new ads about its depth of content that are incredibly creative and captivating. I’ve had an idea to time up any ad investment for my clients on Tubi with whenever they released a new marketing campaign, assuming that their excellent work would drive more viewers to its platform. That hypothesis might be right after all - not only is Tubi a case study in how brand marketing can separate an undifferentiated service from the rest, but the ability for its advertising to drive results offers an opportunity for other advertisers looking for incremental reach and impact with their investments.

9. With Netflix announcing yesterday they’ll be increasing their plans to $20+ a month, and the other services following suit, I’m fascinated to see if the TV time spent numbers change at all for October or future months. For example, will a price hike on Netflix be met with lower TV time spent in October? If not, then it means people really do view ad-free streaming as a utility, or, they are migrating to that service’s ad tiers faster than before.

10. That was a lot. Back to parenting.

Stay thinkin,

Danny