Can Netflix Out-Stream the Competition?

On the heels of a great quarter for Netflix (NASDAQ: NFLX  ) , a new Sandvine report shows that the company continues to hold the No. 1 in video streaming, and it's showing no signs of letting up.

But Netflix competitors are all vying for more user traffic, and the company can't let down its guard any time soon.

Getting in on the streaming action
For the past three years, Netflix took one-third of all Internet traffic in North America. No joke, that's a serious amount of traffic. And for the first part of 2013, the video content service has topped the video downstream source list, taking 32.3% of all home network peak video traffic.

By comparison, Google's (NASDAQ: GOOGL  ) YouTube took just over 17% and Hulu came in at a dismal 2.4%. But Google's video darling takes up the vast majority of mobile video traffic -- more than six times that of Netflix's. Not to be outdone in the mobile space, Netflix was able to double its mobile traffic in the past year, and the Sandvine report expects the company to continually increase its mobile footprint.

Netflix easily outpaced its other major competitor in the online streaming space, Amazon.com (NASDAQ: AMZN  ) . Amazon's video streaming service only accounted for 1.31% of fixed-source video traffic in the first part of 2013. Amazon, trying to keep up with Netflix, recently released 14 pilot episodes online and is asking viewers to vote on which shows they want the company to make into full seasons. For now, it hasn't seemed to pay off for the company, but that may all change if Amazon releases its rumored set-top box this fall.

Not to be forgotten in the video space, Apple (NASDAQ: AAPL  ) devices -- including the iPod, iPad, iPhone, Apple TV, and Macs -- take up a whopping 35% of all home network video streaming. Surprisingly, though, iTunes takes up only 1.9% of downstream traffic while Netflix grabs a third.

The king on streaming
Netflix just added 3 million subscribers this past quarter -- putting the total around 36 million -- and its original series House of Cards was a huge hit, with the much-anticipated Arrested Development coming out later this month. Investors have been rewarded for Netflix's hard work in the video streaming space, bringing in returns of almost 200% over the past year.

Going forward, it looks as if Netflix needs to keep doing more of the same, while keeping a close eye on the competition. Amazon and Apple may not be eating into Netflix's video streaming right now, but you can bet the two tech giants aren't going to let the company run away with all the video traffic without putting up a good fight.

There's no doubt that Apple is at the center of technology's largest revolution ever and that longtime shareholders have been handsomely rewarded, with more than 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on reasons to buy and reasons to sell Apple and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.


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  • Report this Comment On May 16, 2013, at 8:14 AM, jb757 wrote:

    I believe Netflix total subscriber count is 33 million. It may be 36 million if you count subscriptions within the DVD/streaming dual plan.

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