Online Viewing Surpasses Estimates
We have no opinion on Netflix as an investment, but we are very interested in watching the destabilizing effects of on-demand viewing on the traditionally delivered TV market. The world is still in the nascent stages of the destruction of great businesses by the Internet to the benefit of consumers.
Users of the company’s online movie and TV-streaming service watched more than 2 billion hours of content in the last three months of 2011, the company said today in a statement.
The number exceeded the 1.2 billion-hour estimate of Richard Greenfield, an analyst with BTIG Research. Netflix Chief Executive Officer Reed Hastings in December said fourth-quarter streaming hours would be “well over” 1 billion, according to Greenfield.
“It now appears our interpretation was far too conservative,” Greenfield wrote in a blog post.
He estimates Netflix would be the 15th most-watched U.S. TV network when compared to traditional cable and broadcast channels.
The $7.99-a-month service is eating into traditional television-viewing, Greenfield said.