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Odd Couple: Netflix Tops YouTube for TV Shows, Movies

10 Mar, 2014 By: Erik Gruenwedel

Investor research touts findings despite the fact companies offer different services

Netflix topped YouTube as an online destination for movies and TV shows, according to RBC Capital Markets. The investment firm, which is bullish on Netflix’s stock, said that among 1,000 online respondents in a February survey, 44% preferred Netflix compared with 43% for YouTube; 27% for Hulu and 22% for Amazon.

The apples-to-oranges comparison said it was the first time Netflix topped YouTube since the survey’s inaugural run in 2011.

It’s a surprise the survey was ever conducted considering Netflix is a subscription streaming service and YouTube isn’t. YouTube is primarily a site for user-generated videos and transactional video-on demand of new releases (via Google Play). Netflix doesn’t have access to new-release movies or TV shows, with the exception of its original programming.

More importantly, YouTube continues to dominate as the go-to destination for online videos. Google-owned YouTube topped all online video platforms with more than 159 million unique viewers in December, according to comScore.

The RBC survey didn’t qualify whether the results included Hulu Plus or Amazon Prime Instant Video. Last month, Amazon confirmed that Prime Instant Video had more than 20 million subscribers — about two-thirds of Netflix’s domestic sub base.

Regardless, RBC analyst Mark Mahaney believes Amazon Prime Instant Video — not Hulu Plus — is Netflix’s biggest competitor in the United States going forward.

Not surprisingly, 66% of Netflix respondents said they were at least “very satisfied” with their subscription, which is up 3% from RBC’s previous survey last November. Also, 69% of respondents said they wouldn’t cancel service in the next three months — up 3% from the last survey.

Netflix recently stopped reporting churn — the percentage of subscribers canceling service. The RBC survey found that just 6% of respondents were likely to cancel Netflix service in the next three months.

"Our key survey findings support the conclusion that Netflix offers an increasingly compelling consumer value proposition in the U.S.," Mahaney wrote in a note. "We continue to believe that Netflix has achieved … sustainable scale, growth, and profitability that isn't currently factored into its stock price. Netflix is on track to become an Internet video utility."

Notably, Netflix shares, which reached an all-time high March 6 at $458 per share, dropped slightly March 10 following speculation the service is about to raise subscription prices.


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