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Netflix: 2 Billion Hours of Content Streamed in Q4

4 Jan, 2012 By: Erik Gruenwedel

Tally doubles the amount CEO Reed Hastings initially said subscribers would stream through Dec. 31

Netflix Jan. 4 said its members globally streamed more than 2 billion hours of television shows and movies in the fourth quarter of 2011 — underscoring its push to become the de facto subscription video-on-demand service.

Los Altos, Calif.-based Netflix said more than 20 million of its subscribers stream predominantly TV programming (60%) throughout 45 countries. The subscriber figure is about 2 million streaming-only subs fewer than what some analysts expected Netflix to have by the end of last year.

Indeed, Netflix subs are streaming more than 60 minutes of content per day — more than four times the amount streamed in November, according to Michael Pachter, analyst with Wedbush Securities in Los Angeles.

Pachter said that the daily streaming figure should make content owners reconsider what they charge Netflix for license rights. He said the usage equates to about 12.5 cents per hour Netflix is paying for the content — considerably less than the the 50 cents per hour he says Amazon and Apple pay for content.

“I can’t really make sense out of why Netflix would brag about 2 billion hours,” Pachter said. “I don’t think that they will be able to maintain this level of profitability. I think content owners believe that their content is worth a lot more than that, so Netflix may see prices rise pretty fast.”

The streaming data follows a day after Netflix said it would bow its first original scripted series, “Lilyhammer,” to members beginning Feb. 6. Netflix, in 2011, signed multiyear content license agreements with CBS, 20th Century Fox, Lionsgate, Miramax, Open Road Films, NBC Universal, Dreamworks Animation, MGM and the Disney-ABC Television Group, among others.

“In the coming months, Netflix members can enjoy complete seasons of TV series from all the major networks and most branded cable channels, as well as films like Drive, Hugo, Captain America and Margin Call,” Netflix chief content officer Ted Sarandos said in a statement. “The more great TV shows and movies Netflix adds, the more people watch.”


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