The Top TV Shows Of 2017, And The Inexorable Rise Of Netflix

This is a guest post by MIDiA’s Tim Mulligan (also my brother!)

For the past 15 months MIDiA Research has been tracking every quarter more than 60 leading TV shows across the US, UK, Canada and Australia. With the fragmentation of TV audiences and the rise of streaming video services like Netflix and Amazon Prime Video that are notoriously guarded with their data, it is becoming progressively more difficult for TV companies and advertisers to know just how popular individual TV shows actually are. Many are increasingly turning to social media as a guide to popularity, but these are demographically skewed. For example, the audiences of Facebook and Twitter are both older, so rankings based on these platforms skew results towards shows that are popular among older consumers. This is why the likes of The Walking Dead and Game of Thrones usually top such rankings. (More than half of the audiences for both shows are aged 35 and above, compared to, for example, just 36% for 13 Reasons Why).

This is why we developed the MIDiA TV Show Brand Tracker, surveying 3,500 consumers, to track popularity of shows with a neutral and objective methodology. The results provide a unique view of which shows are resonating with consumers in the streaming era.

CBS’s The Big Bang Theory tops MIDiA’s Brand Tracker rankings with an average 45% fan penetration across all of 2017. The Big Bang Theory tends to underreport on Twitter and Facebook rankings but has topped our list in each quarter in every market except for the UK where it is shunted into third place by the BBC’s Sherlock and ITV’s Broadchurch. CBS also takes second spot with 41% fan penetration, holding the same position in the US and Australia, but slipping to third in Canada and sixth in the UK.

2017 was a massive year for HBO’s Game of Thrones with season 7 premiering in July, which drove a three-percentage-point spike in fandom in Q3 – up to 33%. Game of Thrones is a top-four show across all four markets surveyed. Although Game of Thrones is HBO’s only show in the top 20, the network has three other shows in the Top 40 including Westworld (which maintained strong fandom despite having aired in December 2016, suggesting that season 2 will get off to a strong start in 2018).

The BBC is one of the strongest performing networks with three shows in the top 20. AMC’s The Walking Dead takes sixth position with 27% penetration, but fandom varies markedly by market, slipping to just 10^th in the UK.

Perhaps the biggest story of 2017 is the rise of Netflix as a TV network. Netflix, with seven, has more shows than any other in the top 40, though only two are in the top 20 (Stranger Things and House of Cards). Superhero shows have been a big win for Netflix with Jessica Jones, Luke Cage and Daredevil all in the top 40. But, the one to pay attention to is 13 Reasons Why at number 23, driven largely by 16-24-year-old viewers. In the post-linear schedule world Netflix has learned how to super serve audience segments with shows that are ‘prime time’ titles within its service that would not be able to occupy prime time slots on broadcast TV because their appeal to older audiences is limited.

Stranger Things was Netflix’s biggest hit of 2017, taking eighth spot overall, but first among 16-19 year olds and second place for 20-24 year olds. Netflix might have built its revenue business around 25-44 year olds but it is winning the programming battle for younger millennials. Traditional TV networks should pay heed.

If you would like to learn more about MIDiA’s TV Brand Tracker and how to get access to the data, email us at info@midiaresearch.com 

Music’s Role In Digital Content Is Small And Shrinking

This week I delivered a keynote at Mobile World Congress in Barcelona on the future of media. I focused on three key areas of digital content:

• Digital Music
• Online Video
• Mobile Apps

Pulling together these three different strands really shone a light on where music sits in the broader digital economy.  One of the key themes I explored was how the streaming music business relies on pretty much the same model as mobile games like Clash Of Clans, i.e. relying on a tiny share of the total audience to pay. The big difference is that the annual ARPU of a King customer is $290.41 while for Universal Music the annual ARPU of a streaming music subscriber is $29.77.  Universal Music rightly got a lot of attention recently for becoming the first billion Dollar streaming music company. Universal has managed to make streaming revenue scale. However streaming remains a revenue stream that is plagued by free. Only 10% of the total streaming audience (i.e. including YouTube and Soundcloud) is paid, and though this small group generates 71% of Universal’s streaming revenue, the blended ARPU is just $4.15. That’s $4.15 for the entire year of 2015, not per month. You can see my full analysis of how free-to-paid conversion ratios and ARPU compare across big media companies here.

But perhaps most revealing is the relative scale of music compared to everything else. As the graphic below reveals, digital music (at retail values) will be just 10% of digital content revenue by 2020, down from 16% in 2015. So digital music is both small and losing market share. Online video, which is at an earlier stage of its development, is already bigger (at retail value) than the entire recorded music business (at trade value), while mobile app revenue is double that of online video.

Yet music continually punches above its weight. Its impact on culture and emotions far outweighs that of apps (for now at least) and music artists still have far more dedicated fan bases than actors generally do (again, for now at least). Music’s impact is far beyond its revenue, even in business terms. Just look at all the brands, telcos and device companies that fall over themselves to be associated with music.

Nonetheless, the reality that must be accepted is that sooner or later, recorded music’s diminished revenue footprint is going to catch up with it. Major record labels enjoy a privileged position, because rights are so concentrated in music they each have an effective monopoly power because each of them have the power of veto if they say no. (You try launching a mainstream music service without one of the majors). This can sometimes lead to hubris and over confidence. In video and apps, rights are far more fragmented and consequently no single rights owner has market shaping power. (As an aside it is worth asking whether rights concentration is contributing to digital music losing pace with the digital content economy.) The clear risk is that music rights holders eventually overplay their hand, demanding too much from partners with too little flexibility. I have been hearing for some time from a number of ‘partner’ companies that they are beginning to question whether music is worth the hassle. Meanwhile SVOD services and YouTubers are waiting eagerly in the wings…

Another part of the equation is that recorded music revenue only paints a small part of the global music industry picture (i.e. also including publishing, live and merch). In fact, recorded music has declined from being 60% of all music industry revenue in 2000 to around 30% today.  Most artist managers now view recorded music primarily as a marketing platform to drive live revenue. Unfortunately record labels aren’t in a position to think that way.

Whatever perspective you view this from though, one thing is clear, music’s role in the global digital content marketplace is small and shrinking.