Stunning story revealed in latest Netflix movie stats

New study underscores stunning emergence of Netflix as a dominant supplier of digital movies.

On a day when the stock market got creamed--at one point down more than 200 points--shares of Netflix were up more than 14 percent in early afternoon trading today. Irrational exuberance or the smart money laying bets?

Maybe a bit of both.

It turns out that Netflix, which now counts 20 million subscribers, has turned into a colossus when it comes to viewing movies on demand over the Internet. In a new study out from NPD, Netflix's share of digital movie units, either downloaded or streamed, was put at 61 percent between January and February.

Consider that the No. 2 was Comcast at 8 percent, with a three-way tie for third at 4 percent among DirecTV, Time Warner Cable, and Apple. What the numbers underscore is how quickly video on demand is catching on with consumers--a shift that's worked to Netflix's advantage.

"Sales of DVDs and Blu-ray Discs still drive most home-video revenue, but VOD and other digital options are now beginning to make inroads with consumers," NPD's Russ Crupnick entertainment analyst said in a press release. "Overwhelmingly digital movie buyers do not believe physical discs are out of fashion, but their digital transactions were motivated by the immediate access and ease of acquisition provided by streaming and downloading digital video files."

That shift has been responsible for no small amount of friction between Netflix and the studios. With the home video market in flux--people are buying fewer DVDs--the studios want Netflix to include a "buy" button they could embed in their films to sell digital versions of their movies. So far, Netflix has not agreed to go along.

 

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