Netflix (NFLX) Average Hours/Sub Shows Continued Growth in January - Analyst

February 5, 2014 8:50 AM EST
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How much do Netflix (Nasdaq: NFLX) subscribers watch on a daily basis? Quite a bit, actually.

BTIG's Richard Greenfield issued a brief report on Tuesday night on the subject. Taking available data into consideration, the analyst believes each Netflix sub views streaming content for about 96 minutes per day. he derived the number from the following:

-- Netflix is saying 2 billion hours in January 2013.
-- The Netflix 2 billion is a global comment. However, the vast majority of their streaming subs are in the US and US subs are more active streamers than international subs, so let’s assume that 83.5% of the streaming hours occurred within the US (we used 88% during Q1 2013), which implies nearly 1.7 bn hours of domestic streaming during each month of January 2013 (note: we estimate international subs are streaming about 58 mins/sub/day, or about 60% of US streaming levels per sub per day up about 14% y-o-y).
-- We estimate Netflix’s average domestic streaming subscribers in January 2014 to be about 33.8 mm.
-- 1.7 bn hours of domestic streaming in the quarter equates to 100 bn mins per month.
-- 100 bn mins per month with 33.8 mm subscribers on average equates to 2,965 mins of Netflix viewing per subscriber in January, or roughly 96 mins/sub/day and equates to 49 hours per/sub/month.
-- 96 mins/sub/day would be up low double-digits y-0-y (exact figures are challenging without the specifics on January last year).

The data could mean that continued increase in streaming content per sub reduces churn and aids net additions.

Below is a chart from BTIG outlining broadcast monthly network usage. Greenfield notes that Netflix could be within striking distance of Fox, which broadcasts less hours of primetime programming than CBS/ABC/NBC.

Shares of Netflix are down in early trading Wednesday.



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