More people are watching Netflix (Nasdaq: NFLX) on TV than any other device, according to statistics gleaned by NPD Connected Intelligence and presented in a blog by John Buffone, director of devices.
"The inherent success of Netflix streaming can be attributed to its content library and TV-centric strategy," Buffone wrote. "In Q4 2012 we saw 40 percent of individuals with a TV connected to the Internet were watching Netflix. And streaming video users are continuing to migrate from the computer."
In fact, he reported, 21 percent of connected TV users moved over from computer-watched OTT to the TV in the quarter, even though Netflix is nowhere to be found on the conventional multichannel video programming distributor (MVPD) channel listings.
"It's not a channel," Buffone wrote.
Which partially explains the demographic that's making the move.
"More than half of consumers age 18-24 that have a TV connected to the Internet watch Netflix on TV," Buffone wrote.
The qualifiers are important, especially the notion of an 18-to-24-year-old with access to a connected TV. On the other hand, this is just the demographic that would be expected to make the effort to find content via non-traditional TV channels and has led Buffone to speculate that Netflix could eventually change the definition of TV by becoming a destination on a menu rather than a conventional channel.
"You no longer just tune to, say, channel 27 to watch TV; pressing the Netflix button on the remote is just as easy," he concluded.
The Netflix evolution will no doubt be a major conversation point when the company announces its fourth quarter 2012 financial results this afternoon. That announcement, which will be followed by a question-and-answer session with management at 3 p.m. PT (http://ir.netflix.com), has already drawn a slew of speculation from the analyst community.
Among the questions analysts may pose during the call is whether Netflix, which received a major buy-in from investor Carl Icahn, is in play or whether the company will remain independent. Icahn hinted the company was in play and management adopted a "poison pill" stance in response. The company's stock has surged on the investment--and some good news like the agreement the streaming media provider cut with Walt Disney Co. (NYSE: DIS)--but analysts are tough and may want to see some money changing hands.
Also in question is how many subscriber additions the streaming media business will reveal. The company had set a goal of adding 1.3 million to 2 million in the quarter. J.P Morgan analyst Doug Anmuth estimated a net increase of 1.58 million U.S. steaming subscribers to bring the service's total to 26.7 million. He also suggested the company will predict a gain of 1.1 million subscribers in the first quarter of the new year.
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