Do Netflix, Inc. (NFLX) Customers Really Watch More Regular TV?

Do Netflix, Inc. (NFLX) Customers Really Watch More Regular TV?

A recent study from TiVo has people claiming that Netflix, Inc. (NASDAQ:NFLX) viewers watch just as much TV as other people, and then watch Netflix in addition to that, but the details of the study paint a very different picture.


TiVo Inc. (NASDAQ:TIVO), the digital video recorder that lets people record their favorite shows to watch later, did a survey of its customers and found that subscribing to Netflix made people more likely to watch other premiere shows like HBO’s Game of Thrones and Showtime’s Homeland. It also found that people who specifically watched Netflix, Inc. (NASDAQ:NFLX)’s House of Cards viewed 85 percent more HBO than non-Netflix households.

Seth Klarman’s 2021 Letter: Baupost’s “Never-Ending” Hunt For Information

Baupost's investment process involves "never-ending" gleaning of facts to help support investment ideas Seth Klarman writes in his end-of-year letter to investors. In the letter, a copy of which ValueWalk has been able to review, the value investor describes the Baupost Group's process to identify ideas and answer the most critical questions about its potential Read More

HBO and Showtime are not ‘traditional television’

HBO and Showtime’s best show (debatably, of course) are hardly stand-ins for all of traditional television. It might be true that Netflix, Inc. (NASDAQ:NFLX) subscribers watch more television than other people, but that’s not what this study shows. This just says that people who are interested in one premium service (Netflix) are more likely to be interested in other premium services. If anything, this study is another sign that people are moving away from standard cable, with its plethora of low quality options, towards services with fewer, better options.

If it’s true, this is actually great news for Netflix, Inc. (NASDAQ:NFLX), which has staked its future on the idea that TV is evolving and Netflix, Inc. (NASDAQ:NFLX) is well-positioned to capture the changing market. Just look at last week’s earning reports, when Netflix tried to convince investors that the low number of new subscribers wasn’t a serious problem.

Netflix’s TiVo viewers don’t represent the public

The other problem with this study is that it was conducted with TiVo users. That means we aren’t just looking at the habits of Netflix subscribers, but the habits of people who use Netflix, Inc. (NASDAQ:NFLX) and TiVo Inc. (NASDAQ:TIVO), and in many cases Hulu or Amazon Prime as well. This is a survey of TV’s power users, not the ‘average joe’ watching whatever’s on after work. Think of it this way, what the survey really says is that people who spend money on one group of premium services (Netflix, TiVo, Hulu, Amazon Prime) are more likely to spend money on another group of premium services (HBO, Showtime). It’s not shocking and not particularly far-reaching.

Nonetheless, the data has been making the rounds, along with the usual arguments that people are watching more media than they used to, spending more time in front of the tube, and so forth. It would be interesting to have a breakdown of how premium channels correlate to overall habits, but that’s not what we got from TiVo Inc. (NASDAQ:TIVO).

Updated on

No posts to display