Tuesday 23 April 2013

Netflix surges ahead. 3 million new subscribers last quarter. 36m to date. This is killing traditional TV viewership.


The surge of Netflix goes on and on.

They've just announced 3 million new subscribers in the first quarter (beating brands like HBO). That means they've over 36 million subscribers (of which 'm one).

Revenue for the quarter broke 1 billion usd and the share price went over 200 usd for the first time. Extraordinary stuff for what is, pretty ordinary content but the key is ease of access at a low cost. Their free trial, only resulted in 8000 people cancelling, a really low churn rate so generally people are happy.

Netflix are great at what they do and now lead the way in TV broadcasting and have developed their own shows. Nevermind killing high street video rental who were too slow at getting into the space.

They also know how to grow - market by market - with stealth. Pick off country by country.

The other beneficiaries of Netflix are brands like Sony who in allowing connectivity through their Xbox for example, generate revenue and indeed all connected TV's will do well out of this - provided, Netflix agree to allowing them take their content.

This is a case where such a strong content partner can now dictate who carries their signal and on what terms.

Whilst TV broadcasters continue to commission "reputable" research showing TV viewing still remains high, it is to say the least, dubious. They continue to try to hide the ongoing collapse of TV viewing habits but publishing data about the TV itself. In other words, claiming that those using are using a TV set to view content are "TV viewers" ....when in fact, they are watching other content such as Netflix. Or YouTube via their Television set.

These massive increases in online content viewing are helping to dispel the myth that TV viewing of traditional broadcasters content, is holding steady - when clearly it's not.

Simply, the Netflix numbers and the facts about usage of Social Media in the home from Facebook and others, are exposing the death of traditional broadcasting. 

They both cannot be right.