Static: Netflix posts big gains, but pay channels are still in game

George Lang: Netflix posted huge increases in its subscription numbers in the fourth quarter of 2013, adding 2.3 million U.S. users to its streaming video service.
BY GEORGE LANG glang@opubco.com Modified: January 27, 2014 at 11:00 pm •  Published: January 27, 2014
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Netflix posted huge increases in its subscription numbers in the fourth quarter of 2013, adding 2.3 million U.S. users to its streaming video service. To put that jump in perspective, that's like having every single person in Oklahoma City and Tulsa sign up as a new subscriber.

Lately, these numbers are becoming fairly common for Netflix as more people rush the service's all-you-can-watch video buffet. But it was another statistic — a contested one involving premium cable channels — that caused some industry indigestion.

Last week, the market research company NPD Group released a study saying that pay channels such as HBO, Showtime and Starz had lost 6 percent of their subscribers in the past two years, while streaming services such as Netflix, Hulu Plus and Amazon Prime had risen by 4 percent. The report concluded that viewers were either trimming or chucking their premium channels, and media analysts divined that those people might be trading their HBO for Netflix.

All three networks mentioned in the study fired back with reports of actual subscriber growth in the past 12 months, blunting the meme just a little.

The whole thing smacked of Internet “click-bait” when the truth is not quite as obvious as a “Netflix up, pay cable down” equation. It is far more indicative of a seismic shift in how people want their entertainment delivered, and most of the pay channels are part of that revolution.



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