Netflix Continues to Lead the Share of Internet Traffic in the US
Why Netflix's Stock Increased 30% in the Last 2 Months
Netflix accounted for ~37% of downstream broadband volume
Previously in this series, we discussed the opportunities and risks that lie ahead for Netflix (NFLX) as it gets ready to launch its service in China. However, Netflix’s lead in the North American region continues in terms of the share of Internet traffic from its platform.
According to a report from Sandvine, Netflix accounted for 36.5% of downstream Internet traffic on computers and networks in North America in March 2015—up from 34.9% six months ago. As shown in the above chart, Google’s (GOOG) (GOOGL) YouTube was a distant second in this segment. It accounted for 15.6% of all the downstream Internet traffic in North America. Apple (AAPL) iTunes, Facebook (FB) and Amazon’s (AMZN) Amazon Video are some of the smaller players in this segment.
Netflix’s traffic increases due to its improving content
Netflix’s growing traffic is mainly because of its improving content, especially the original content. During the first quarter, Netflix launched the third season of House of Cards and new shows Unbreakable Kimmy Schmidt and Bloodline. The shows were a success. Netflix also released three new original movies—PeeWee’s Big Holiday, Jadotville, and Beasts of No Nation.
To gain diversified exposure of Netflix, you can invest in the SPDR S&P Retail ETF (XRT). XRT invests 1.3% of its holdings in Netflix.
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