Netflix, Inc. Is Becoming More Like iTunes

The streaming sensation stays atop the Internet traffic charts, while technology for illegal file sharing takes another hit.

May 18, 2014 at 1:00PM

BitTorrent is losing ground to Netflix, Inc. (NASDAQ:NFLX), according to Sandvine's latest survey comparing the largest consumers of downstream Internet traffic. The message? More users are turning to legal forms of streaming, and most of those seem to be turning to Netflix. Fool contributor Tim Beyers explains the implications in the following video.

Netflix has become for the movie and TV business what iTunes was for the music business years ago: a legitimate streaming outlet that's given users reason to cut back on BitTorrent, which can be used for distributing copyrighted material illegally.

Users have cut back on BitTorrent as a result. A November study from Sandvine found that traffic on the file-sharing system had declined some 20% during the prior six months. Ten years ago, BitTorrent accounted for 60% of Internet traffic.

Now, it's Netflix that's king of prime time. Sandvine's latest data shows the company accounting for 34% of "downstream" traffic such as video-on-demand, and 31% of all traffic, versus just 6% for BitTorrent, and 12% for YouTube.

How should investors react to this news? With a dose of humility, Tim says. Netflix has been leading the prime-time traffic wars for a while. Only a material jump in its share -- think 25% or more -- would impact the stock price at current levels.

Now it's your turn to weigh in. How often do you watch Netflix during peak Internet hours? Please watch the video to get the full story, and then leave a comment to let us know your take, including whether you would buy, sell, or short Netflix stock at current prices.

How you can cash in
You know cable's going away. But do you know how to profit? There's $2.2 trillion out there to be had. Currently, cable grabs a big piece of it. That won't last. And when cable falters, three companies are poised to benefit. Click here for their names. Hint: They're not Netflix, Google, and Apple.

Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Netflix at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool recommends and owns shares of Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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