Analyst Says Netflix, Inc. Impacting Traditional TV Viewing

Analyst Says Netflix, Inc. Impacting Traditional TV Viewing
NFLX Photo by Matt Perreault

Netflix has become increasingly popular over the last few years. According to Michael Nathanson, an analyst at MoffetNathanson, the streaming company has led to a reduction in the traditional TV viewing, and he expects the trend to continue.

Eating into TV viewing

Netflix’s viewing hours in the last quarter were recorded at 10 billion, in contrast to 129.5 billion viewing hours documented for conventional TV viewing. This suggests that the streaming service amounted to almost 6% of the total TV viewing in the first-quarter of 2015, says a report from Re/code

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“Netflix as a percentage of traditional TV will steadily rise to the low-double-digit range over the next four years, representing the majority of the declines in traditional TV viewing,” Nathanson noted.

In addition, Netflix viewing hours doubled in the span of a year. The analyst also suggested that the decline in interest in watching traditional TV is most likely to continue for a while. He predicts that conventional viewing will fall from 129.5 billion to 117.6 billion hours in the next five years, while Netflix’s share in aggregate TV viewing will increase to 11.7%.

Netflix preparing for the future

There are voices claiming that Netflix is ‘eating into’ into the businesses of TV networks and studios, who themselves provided the streaming service with the rights to showcase the repeats of their content on its platform. Moreover, there have been rumors that networks and other content providers are looking to restrict the sale of content to Netflix, says the report. The streaming service rejected this notion in their most recent earnings call.

Nevertheless, to be prepared for any such moves in the future, the company’s CEO recently indicated that Netflix is planning to own more original content, which in turn, suggests that the company is making efforts to become more independent from content providers. Whatever the case may be, the streaming service is doing quite well for now. Netflix already has nearly 40 million subscribers in the U.S., which is 17% more than the year before.

Along with Netflix, Amazon and Hulu have also contributed to the decrease in the traditional TV viewing. These two companies are the other major on-demand streaming services available today.

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