Wednesday, May 20, 2015

Netflix: Time To Care About Sharing

When it comes to streaming services, there are tens of millions of users in the US. Netflix (NASDAQ:NFLX) is the clear leader in the space, but Hulu and Amazon's (NASDAQ:AMZN) Prime segment also serve plenty of consumers. We recently received some interesting data regarding the sharing of these services. Unfortunately, the data does show why Netflix's US potential may be capped, and US growth is already slowing. Today, I'll analyze this issue and detail why shares of the streaming name may be topping out again.

Digital media research from Parks Associates revealed that 57% of US broadband households access an OTT video subscription. Based on a Q3 2014 survey, 8% are using a subscription video account held by someone outside of their home. In regards to the specific services mentioned above, Parks provides the following data.

Roughly 11% of Netflix subscribers are using an account paid for by someone else, which leads the pack. Account sharing is the highest among younger households, where 22% of 18-24 year olds using an OTT service are using a subscription paid for by someone outside of their household. As the research firm details, accounting sharing is one of the major problems for companies trying to monetize the demand for consumer content.

From the article "Netflix: Time To Care About Sharing" by Bill Maurer.

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