Netflix Has Plenty of Competitors, and None of Them Are Close
So far, none of them are remotely close to challenging Reed Hastings and company.
That’s a reasonable conclusion to draw from a new report out from Sandvine, the broadband service company that tracks Internet usage.
Sandvine says that during the Web’s primetime hours, Netflix accounts for 33 percent of “downstream” traffic in North America — much more than any other single site or service.
That’s the same number Netflix posted last spring, when Sandvine predicted that the service’s usage had peaked. And it’s higher than it was in the spring of 2011, before Netflix raised its prices and lost some of its best-known movies.
YouTube accounts for 15 percent of Web use, but that site is almost entirely free. Netflix’s paid competitors generate much smaller numbers: Amazon is at 1.8 percent, Hulu is at 1.1 percent and HBO Go comes in at 0.5 percent.
You can add plenty of caveats to those numbers — they only count home use, for instance, and don’t track wireless usage at all. But if you believe they’re at least directionally accurate, they give Hastings plenty of distance between his service and his newish competitors.
That tracks with anecdotal reports I’ve heard from content providers that sell stuff to both Netflix and Amazon — they tell me that Amazon is buying lots of content for its “Prime Instant Video” service, but that not many people are watching it. And it runs counter to the conclusion I drew from Hastings’s most recent shareholder letter, which I interpreted as a warning that Amazon was making headway.
But if you want to spin this more positively for Amazon, you can do that, too.
Sandvine CEO Dave Caputo says that, until recently, Amazon’s usage numbers were too small to register at all. Now it’s the leader of Netflix’s direct competitors. Hulu, meanwhile, has stayed in place since the last time it showed up in Sandvine’s reports, in the spring of 2011.
Bear in mind that Sandvine is tracking the flow of data via broadband pipes, which means it is tracking usage — and file size – instead of reach. Netflix, for instance, has about 25 million subscribers worldwide, while YouTube boasts some 800 million monthly visitors.