People Spend Twice As Much Time On Netflix Than On Hulu
Netflix and Hulu are the two leading video streaming services on the Web when it comes to mainstream TV shows and movies. More people watch Netflix online than Hulu, and have since about 18 months ago.
Context & Ripple Effects
The time-spent gap puts numbers on a split AllThingsD described in July 2011: Netflix is for movies, Hulu is for TV shows, and neither service had yet cracked the iPad or iPhone. What the new data adds is duration — Netflix has led Hulu in online viewing for roughly 18 months, meaning its engagement advantage predates this year's pricing turmoil rather than resulting from it.
First-order effects
- Netflix enters 2012 with its engagement lead intact just quarters after beating Street estimates on $822 million in Q3 revenue, strengthening its position in content-licensing negotiations where hours watched justify renewal fees.
- Hulu's half-sized audience caps its reach until distribution widens — reports that Apple TVs internally run a feature-complete Hulu Plus app remain unconfirmed.
Second-order effects
- Confirmed reporting already ties surging Netflix and Hulu viewing to swelling U.S. Internet traffic that may raise cable bills, putting ISPs and cable operators under pricing pressure as streaming hours compound.
- Netflix's price change was expected to benefit Redbox, and a durable engagement lead gives disc-rental rivals a motivated, price-sensitive pool of lapsed subscribers to court.
Third-order effects
- With many Americans choosing legal streaming over BitTorrent piracy, time spent looks set to become the ranking metric for streamers — ahead of raw subscriber counts — rewarding whoever accumulates viewing hours first.
- If neither service has solved tablets and phones, as the mid-2011 device analysis argued, mobile platforms become the next battleground where the engagement hierarchy gets settled or overturned.
The trend: Streaming engagement is consolidating around a single leader measured in hours watched, pushing time spent — not subscriber counts — toward the industry's defining competitive metric.