Netflix, which at one time seemed like it was in real trouble of continuing its existence (following its controversial plan to split stream off from mail rental of discs), has instead rebounded and found a potential gold mine that had been sitting right under its nose since it opened its doors: original programing.
This programing helped Netflix CEO Reed Hastings recently say that 4 billion hours of content were watched on the service during its first quarter. This statement led to Richard Greenfield, of BTIG Research, to call the company "now likely the most-watched cable network."
He added that the service's customers average nearly an hour and a half of content watched per day, which per household puts it "essentially in-line with the Disney Channel." Most watching of Netflix occurs in the United States, with Greenfield estimating that there were nearly 28 million Netflix streamers in the first quarter.
These numbers are likely to increase, given original programing such as House of Cards and the upcoming fourth season of Arrested Development, he added.
"After failing to live up to subscriber growth expectations in 2012, the question facing investors is whether Netflix's continued ramp in programming investment is paying off," Greenfield stated. "With streaming per sub per day continuing to tick higher ... we presume churn is continuing to fall -- implying that the price/value of a Netflix subscription is increasing."