For Netflix Viewers, OTT And Devices Rule


That happened pretty fast. Just a couple of years ago I recall speaking with online video providers who were starting to distribute via emerging set-top boxes and laptop-to-TV interfaces like Boxee. Although they found the Web-to-TV path for online video promising, generally less than 2% of their clips were being viewed on TVs. Nielsen's latest study of how people are viewing Hulu and Netflix is remarkable in demonstrating how quickly a popular service can drive adoption of new distribution paths.

We have covered elsewhere today at Mediapost the differences between what Hulu and Netflix viewers are watching. Not surprisingly, TV episodes are the main draw of the former and film for the latter.

Here let's focus on the uptake of different devices. Netflix's distribute anywhere and everywhere approach appears to have been enormously effective. More than half of Netflix viewing is occurring on a TV screen, now, according to Nielsen's survey involving 12,000 online interviews in March. Remarkably, the low-res Wii is responsible for 25% of Netflix viewing, with 14% coming from PCs connected to the TV, 13% from the PS3, 12% from Xbox and 11% from connected Blu-ray players.  

In the horse race for OTT dominance, it is important to note the fair showing for Roku Box for Netflix (5%) relative to both Google TV and Apple TV, which are lagging the field. I must count myself in the minority in that I tend to watch Netflix via both Google TV and Apple TV because I am already on these devices to access other material. In my usage, there is greater value in integrating the service with the dominant viewing experience, and I will often opt for Netflix on whatever device I am already on even if a higher quality alternative input is available.  

Given the installed base of game boxes and their longevity in the market, it is not surprising to see that so much Netflix content is coursing through these venues, but the surprising early strength of BD players and Internet-enabled TVs suggests to me at least that we will see these categories increase considerably in the next year. Don't underestimate the tedium most regular TV viewers associate with having to switch out inputs on their TV. In my house, my wife is already on the edge of despair over the complexity of our home viewing rig. The mere mention of "change the input" is met with that special kind of whining groan most associated with asking your teenager to take out the trash. 

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