Netflix Streaming to 20% of US Households an Hour a Day

Netflix‘s (NASDAQ:NFLX) stock rose by more than 10% on Wednesday when the company released its press release citing streaming data. The company mentioned that its customers streamed more than 2 billion hours of movies and TV shows in Q4 2011. ^[1] The figure implies that Netflix is equivalent to the 15th largest cable network in the world, according to a BTIG Research analyst. ^[2] What this also means is that about one-fifth of the U.S. TV households are spending more than an hour everyday watching Netflix’s content. Streaming is clearly a lucrative opportunity and has attracted several other competitors including Amazon (NASDAQ:AMZN) and Dish Network’s (NASDAQ:DISH) Blockbuster.

See our complete analysis for Netflix

With about 20 million streaming subscribers in the U.S. and more than 2 billion hours of content streamed, each streaming subscriber on average is watching 100 hours of movies and TV shows each quarter. Given that a quarter has 90 days, this turns out do be a little over 1 hour each day. Furthermore the 20 million figure amounts to about 17% of the U.S. TV households.

This news comes as a positive stroke after the stocks recent bashing in the last half of the year. Ahead of Q4 2011 results due on Jan 25, it is perhaps trying to build some positive sentiment among investors by releasing such figures.

Our current price estimate for Netflix stands at $126, implying a premium of about 60% to the market price.

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1. Netflix Members Enjoy More Than Two Billion Hours of Movies and TV Shows in Fourth Quarter, Netflix Press Release, Jan 4 2012 [↩]
2. Analyst: Netflix is the 15th largest TV ‘network’ in US, LostRemote, Jan 5 2012 [↩]