Half Of Netflix Streams Are TV Shows


I guess I’m not the only one addicted to watching old Office episodes on Netflix: (s NFLX) The company’s chief content officer Ted Sarandos said yesterday that TV shows account for half of all streaming hours on its Watch Instantly service. “TV has never been never more than 20 percent on DVD,” he added according to paidContent, at its Battle for the Digital Home conference, where Sarandos was speaking.

Part of the reason for this disparity has to do with the fact that Netflix is still playing catchup in the movie department. Customers can access a much wider movie catalog on DVD than via streaming, so movies are naturally rented more often than streamed. Sarandos acknowledged this issue by saying that much of the early streaming catalog wasn’t up to par with disc rentals. “We did the deals we could get — in other words, we got junk,” he said, adding: “(T)hat eventually led us away from movies and towards TV content.”

Netflix has since signed a number of high-profile movie deals, most recently with Epix and Relativity Media. However, don’t expect the company to neglect the TV show audience: Netflix CEO Reed Hastings said on a recent earnings call that the company is “rapidly expanding” its TV show catalog, adding ” thousands of TV episodes.”

This aggressive expansion of TV show content is in part due to the launch of Hulu Plus, which Hastings called a “direct competitor” that has to be taken seriously.

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It’s no surprise that TV does well on streaming. TV shows are shorter, and lend themselves better to spontaneous viewing. They’re also not as well suited to Netflix’s DVD rental format as movies are, particularly if you subscribe to their basic “one DVD out at a time” plan (as I do). If I rent a season of Battlestar Galactica, I’m committing myself (and my wife) to a Galactica marathon, or to not watching any movies on DVD for a few weeks.


That’s pretty much what I was going to say but I’d also add that watching TV shows over the one-at-a-time DVD model is really frustrating because of the lag time between the end of one disc and the start of the other. I usually end up getting the first DVD to see if I like the show and then downloading the rest on torrents and watching those (if they’re not on Netflix Watch Instantly).

The other thing is that there are a lot of people that might watch a TV show on their lunch break but nobody’s going to sit at work and watch a whole movie.


I wonder how much revenue the networks receive from Netflix per episode watched?

And how does this compare to the amount of ad revenue the networks could generate from ads around the content hosted on their own web presences?

And in the future:
What happens if Netflix feels that the ad-supported streaming model is competing with their subscription content?
Will both parties agree to take down ad-supported content to create higher demand for subscription model?
Or inversely, will the networks decide they can generate more demand and revenue from the ad supported model if they sacrificed the subscription revenue they generate from Netflix?

Sorry lots of questions and no answers. It will be interesting to see how the relationship between Netflix and content creators evolves over time.

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