When you speak with someone who owns shares in Netflix, Inc. (NASDAQ:NFLX) it’s difficult to have a conversation about Netflix which is not peppered with the words “gain”, “Icahn”, and “I’m Rich.” When you speak with a friend who started a blog demanding that FOX Network immediately return Arrested Development or face the wrath of a nationwide boycott of the like-minded, it’s equally difficult to avoid having a conversation about Netflix’s streaming share. Fans are so focused on the return of Arrested Development, Netflix’s second foray into producing its own content, that conversation will certainly fall on deaf ears and shift to what’s next for the Bluth family.
Netflix, Inc. (NFLX) Downstream Traffic
Because I have these friends, I must call on this forum to discuss why Netflix, Inc. (NASDAQ:NFLX) is posting such big stock gains and has the money to return Arrested Development to the air. Netflix is responsible for almost a third of peak downstream traffic in North America, according to new stats from Sandvine.
Netflix, Inc. (NASDAQ:NFLX) is currently controlling 32.3 percent of downstream traffic during peak periods. YouTube, with 17.1 percent of peak downstream comes in second in North America fixed network streaming, having risen from 13.8 percent last year.
These are, however, just North American numbers. YouTube is “the leading source of Internet traffic in the entire world,” according to the same recently released report.
While Netflix, Inc. (NASDAQ:NFLX)’s share did drop less than one percent from last year, it’s not due to competition. “In fact, competing pay-video services such as Amazon (1.31 percent) and HBO GO (0.34 percent) saw their relative share decline in a greater amount than that of Netflix,” the report detailed.
YouTube is the undisputed leader in mobile video streaming, but Netflix, Inc. (NASDAQ:NFLX) remains in hot pursuit and is seeing more and more people watching full-length videos as tablets become more commonplace and smartphone displays grow larger and clearer.
“While watching a full length movie, or a 22 minute sitcom, on a 4-inch smartphone screen may not be the ideal viewing experience for everyone, for many subscribers it is becoming a viable experience,” Sandvine said. “Netflix, Inc. (NASDAQ:NFLX)’s downstream traffic share in North America almost doubled from 2.2 percent to 4 percent in just 12 months time, and we believe that this number will increase going forward and that longer form video as a whole will become more commonplace on mobile networks in North America.”