Analyst Todd Juenger says that Viacom and Disney should limit the amount of programming it licenses to Netflix -- and that they should charge more for it.
FORTUNE — Here’s an aspect of the commercial-skipping phenomenon that might often go overlooked: parents who rely on streaming services like Netflix, as well as video on demand and DVRs, to keep their little ones’ minds from being polluted by ads.
Sanford C. Bernstein analyst Todd Juenger’s theory is that programmers of children’s television — specifically Viacom VIA and Disney DIS — should limit the amount of programming they make available to Netflix NFLX and charge more for it. The commercial-avoidance afforded by the video streamer further supports that theory, he noted in a report to investors on Monday. The programmers should also be more picky about when they make the content available, he said.
He recently conducted focus groups consisting of a total of 16 “moms” in which he found that “content control, commercial avoidance and time management” were their top considerations when choosing programming for their kids. The moms also told him that they had originally subscribed to Netflix for themselves, but because of a “dwindling supply” of offerings for adults, they now use the service mostly for their children — who, he adds, don’t seem to much care which device they use for viewing. TV sets, computers, tablets and phones are all fine with them.
And the more they watch Disney and Viacom (which owns Nickelodeon) programming that way, the less valuable it is to those companies, he says. “Viacom and Disney should do everything in their power to steer viewership toward modes with the best long-term economics, namely traditional TV and emerging forms of TV Everywhere VOD,” he wrote. There has been a “negative impact of Netflix on Disney’s and Viacom’s kids’ TV ratings.”
The media companies are going to Netflix, he says, for the short-term revenue spike. But by doing so, they are risking their own “long-term good,” he writes.
Netflix has lost some licensing agreements recently, but it seems highly unlikely that the amount of adult-targeted programming it offers has diminished to the point where “moms” have stopped watching in any great numbers. “There’s a lot of content for adults and one of the reasons we added a special section on Netflix called “Just for Kids” is so that adults can enjoy their part of Netflix,” says Joris Evers, the company’s director of corporate communications. And as he notes, 16 moms “really isn’t representative” even of Netflix subscribing moms, much less of all parents.
Still, the underlying logic of the report might make some sense. An earlier report from Bernstein asserted that the kinds of cable programming most hurt by people moving away from cable and toward Netflix include sports, TV reruns, and kids’ shows. Left largely unaffected according to that report, issued in April, are movies, news, and original scripted shows. That’s because people who watch that kind of programming are more likely to use Netflix as an adjunct to cable, not as a substitute for it.