Netflix is slowly killing pay TV, no matter how upset NBC might be about it. Or, at least, it’s the driving force that turns more and more people to streaming services – after all, Netflix isn’t the only major streaming service out there. But in addition to reshaping our expectations surrounding television, Netflix is also slowly killing online piracy. And studios and TV networks alike should be thrilled about that.
The widely used streaming service revealed various details about its current state of affairs in a letter to shareholders on Tuesday. Among other things, it said that it currently has more than 75 million subscribers, and it reminded some of them that their subscriptions are due to get an “upgrade” soon, regarding monthly costs.
Additionally, Netflix provided data that proves the streaming site is one of the most accessed online services during peak hours, if not the most accessed service, beating other direct rivals including YouTube, Amazon Video, iTunes and Hulu. But Netflix’s research also reveals that BitTorrent traffic – most of which goes to illegal downloads – has dropped significantly in the past five years as Netflix’s popularity has climbed.
“Our focus on ‘winning moments of truth’ means that we compete with all of the activities that consumers can engage in during their leisure time, such as reading a book, playing video games, watching linear TV, movie theatre-going, etc.,” Netflix wrote. “Given the broad array of options, we are privileged that our members around the world continue to devote more time to Netflix, streaming 42.5 billion hours in 2015, up from 29 billion hours in 2014.”
Sandvine data used by Netflix (see graphs above and below) shows that Netflix’s share of the peak download Internet Traffic in North America reached 37% in 2015, up from 35% in 2014 and 21% in 2010. Furthermore, the data shows BitTorrent traffic at around 3% for 2015 and 2014, down from 8% in 2010.
“As we have said previously, Internet TV will likely have multiple winners as the various services are not direct substitutes for each other given differing sets of content,” Netflix added. “A closer look at the Sandvine data shows that the entire Over-the-Top [OTT in the following graph] category is growing as consumers increasingly embrace Internet TV and on-demand viewing and, even better, this growth is coming at the expense of piracy.”