Netflix Crushing the CompetitionBy: Josh Wolford - March 15, 2011
Watching movies at home is getting easier and easier, but that doesn’t mean consumers are spreading around their sources. In a press release earlier today, global retail market researcher NPD Group reports that the lion’s share of downloaded and streamed content consumed by Americans is provided by Netflix. Between January and February, consumers grabbed 61% of their movies from Netflix. In a distant second was Comcast, garnering 8% of the share. Lastly came a three-way tie for third place between Apple, DirecTV and Time Warner Cable with 4% each.
The study noted that digital video in its entirety only accounts for a quarter of all home video, noting that DVDs and Blu-ray still have a firm grasp on the habits of Americans. “Overwhelmingly digital movie buyers do not believe physical discs are out of fashion, but their digital transactions were motivated by the immediate access and ease of acquisition provided by streaming and downloading digital video files,” said NPD analyst Russ Crupnick.
The study also asked people about why they prefer certain types of digital services. Many consumers noted that a pay-per-movie service like iTunes might “have the ‘most current releases available,'” but a subscription service like Netflix has “the best ‘overall shopping experience’ and ‘value for price paid.'”
These figures seem to come at no surprise to stock market insiders. Goldman Sachs analyst Ingrid Chung said today that Netflix is a “screaming buy.” And just last week BusinessInsider reported analyst Nat Schindler as saying, “Netflix’s huge increase in content has created a very high competitive barrier and with Netflix already a low cost service, we see few opportunities for an emerging competitor to pose a serious threat.”
Netflix’s grip on the market seems to be firm and growing tighter. Is there any way for competitors to realistically challenge Netflix’s dominance? Let us know what you think.