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A Billion hours of Netflix and nothing to watch

Last month Netflix streamed more than a billion hours of Internet video and people are still saying there's nothing to watch.

By Steven Vaughan-Nichols on Mon, 07/09/12 - 10:45am.

Guess what? Netflix CEO Reed Hasting reported—on Facebook of all places—that “Netflix monthly viewing exceeded 1 billion hours for the first time ever in June. That's even more impressive than it sounds. Netflix reported that it had delivered 2 billion hours of streaming for its entire December quarter. In other words, Netflix isn't just growing, it's growing at an incredible rate. Indeed, Netflix's streaming-video now accounts for almost a third of peak downstream traffic in North America.

Richard Greenfield, an analyst for BTIG, did some quick and dirty estimates and by his figuring “Netflix would have been the 7th most watched network inclusive of broadcast and cable networks (up from #15 in Q4 2011).  It also would have been #2 among cable networks, slightly larger than ESPN and just below Disney Channel.” Indeed, “Adjusting for distribution, among households with Netflix, Netflix would have been #1 watched network overall including broadcast and cable.”

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So why are friends of mine saying things like “Netflix just doesn’t have any selection anymore. I’m getting out of the habit of looking there because I expect failure.” Well, part of that is we've been saying things like “500 Channels and Nothing to Watch” since the 90s.

Another part of it, though, is even though Netflix is incredibility successful, it's having trouble getting top-tier movies from the media companies. For example, Starz left $300-million on the table in February rather than continue to supply Netflix with movies.

Starz did this because they, and the other media companies, really don't like Netflix's relatively cheap, one-price-for-all-you-can-watch model. Their problem isn't really with Netflix; it's with those customers who are now watching over a billion hours of Netflix video a month.

Sure, Netflix's customers would like more variety, newer movies, and current blockbusters, but they apparently like what Netflix gives them now. The media companies need to get their heads around this. Much as they might like viewers to watch to pay high monthly rates, ala cable; or go with Internet rent on demand ala Apple TV; or pay for premium hybrid cable/Internet offerings such as HBO GO, the simple truth is that people love a low-priced, all you can watch, on-demand network like Netflix.

They need to start working with Netflix rather than fighting with them, or at the end of the day they're going to lose viewers. And that, in turn, will mean they'll lose money.