Netflix boasts 37% share of Internet traffic in North America, compared with 3% for Apple's iTunes

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in iPod + iTunes + AppleTV
Netflix this week revealed that in 2015, its streaming video service accounted for 37 percent of peak download Internet traffic in North America, more than doubling YouTube, and coming well ahead of Apple's iTunes.




The data from Sandvine, revealed in Netflix's quarterly earnings report, shows that Netflix's share of North American traffic data has continued to grow, up from 35 percent of peak downloads in 2014.

Apple's iTunes accounted for 3 percent of peak download traffic in 2015, finishing in a multi-way tie for fourth place with Amazon Video, BitTorrent, Hulu, and Facebook.

"Internet TV will likely have multiple winners as the various services are not direct substitutes for each other given differing sets of content," Netflix said in their earnings report. "A closer look at the Sandvine data shows that the entire Over‐the‐Top 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."

The success of Internet streaming services, particularly by Netflix, comes as Apple is heavily rumored to be pursuing its own over-the-top Internet television subscription service. Just this week, the president of ESPN revealed that his company is in continuous talks with Apple, though the company has been "frustrated" by roadblocks with content owners.




Just last month, it was suggested that Apple had put its plans on hold for an Internet TV service, as content owners were allegedly dissatisfied with its proposal for a $30-per-month "skinny" channel bundle. Apple was said to be interested in a base package with about a dozen channels, but content owners didn't want their deeper cable networks to be left out of the mix.

For now, Apple offers a streaming music subscription service, but does not have an equivalent video component. Instead, iTunes video content is available to purchase or rent on a title-by-title basis.

The newly launched fourth-generation Apple TV does offer a plethora of third-party content --?including Netflix, YouTube and Hulu -- via the newly launched tvOS App Store.

Netflix revealed to investors this week that it ended the previous quarter with 74.76 million members, gaining 17 million net additions in calendar 2015. The company crossed the 75-million-member mark just a few hours after the quarter closed on Jan. 1.

In the fourth quarter alone, Netflix added a record 5.59 million members, bolstered by original programs such as "Marvel's Jessica Jones" and "Narcos." The company expects to grow its subscriber base even more, by 6.1 million users, in the current quarter, thanks to rapid international expansion.
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Comments

  • Reply 1 of 67
    I don't care about traffic. What about profits?
    slprescottpmzjahbladeronnericthehalfbee
  • Reply 2 of 67
    red oakred oak Posts: 888member
    Apple is getting 30% on an increasing portion of Netflix's revenue.   The Netflix app is #12 top grossing  

    this is seems to be completely under the radar
    pmzradarthekatjahbladeronnlatifbplostkiwi
  • Reply 3 of 67
    rob53rob53 Posts: 2,648member
    Doesn't surprise me. Netflix charges a monthly fee for unlimited viewing, Apple doesn't. Of course my wife gets upset because she's watched everything and the majority of "new" movies aren't actually new releases, just new to Netflix. As @mattbookair mentioned, I would like to know how much money Netflix actually makes because they have to be paying out a lot of money. I bet my wife watches at least 30-40 movies and TV shows per month. Even at Red Box's rates, that's still around $50 while we're not even paying a $10 monthly rental fee. I can't see how Netflix is making that much money.
  • Reply 4 of 67
    genovellegenovelle Posts: 1,274member
    How much of that is streamed from an Apple device? I'm sure a lot of Apple TV users play Netflix on them. 
    jahblade
  • Reply 5 of 67
    red oak said:
    Apple is getting 30% on an increasing portion of Netflix's revenue.   The Netflix app is #12 top grossing  

    this is seems to be completely under the radar
    Which is stupid. Why should Apple get 30% of the $10 I pay Netflix every month? Apple's not hosting this content. Even if one argues that Apple should get a commission for driving business to Netflix should that be a recurring monthly commission based on people's subscriptions? I would argue no. When I signed for Netflix I did so on their website so I would assume Apple is not getting a 30% cut?
    gatorguyjonlcnocbuisingularitywiggindasanman69
  • Reply 6 of 67
    josujosu Posts: 217member
    red oak said:
    Apple is getting 30% on an increasing portion of Netflix's revenue.   The Netflix app is #12 top grossing  

    this is seems to be completely under the radar
    Good point, I suscribe to Netflix the moment they offered it here and I do it from the iOS App using iTunes cards to pay for it.
    latifbp
  • Reply 7 of 67
    josujosu Posts: 217member

    red oak said:
    Apple is getting 30% on an increasing portion of Netflix's revenue.   The Netflix app is #12 top grossing  

    this is seems to be completely under the radar
    Which is stupid. Why should Apple get 30% of the $10 I pay Netflix every month? Apple's not hosting this content. Even if one argues that Apple should get a commission for driving business to Netflix should that be a recurring monthly commission based on people's subscriptions? I would argue no. When I signed for Netflix I did so on their website so I would assume Apple is not getting a 30% cut?
    Is speaking about the in app purchases, where Apple gets the 30% cut. I did it that way, easy, no need to give your credit card, you can charge your iTunes account with iTunes cards and by default is active the automatic renovation.
    ronnlatifbp
  • Reply 8 of 67
    josu said:

    Which is stupid. Why should Apple get 30% of the $10 I pay Netflix every month? Apple's not hosting this content. Even if one argues that Apple should get a commission for driving business to Netflix should that be a recurring monthly commission based on people's subscriptions? I would argue no. When I signed for Netflix I did so on their website so I would assume Apple is not getting a 30% cut?
    Is speaking about the in app purchases, where Apple gets the 30% cut. I did it that way, easy, no need to give your credit card, you can charge your iTunes account with iTunes cards and by default is active the automatic renovation.
    I agree that in-app purchasing is super convenient. I'm just not sold on Apple taking 30% of subscription fees. Especially when the subscription price is then raised to cover the 30% like Spotify does. Does it really cost Apple $3 to process a monthly subscription fee for Netflix?
    cnocbuisingularity
  • Reply 9 of 67
    traffic != profit

    (... but Wall Street will love this)
    Deeedsronn
  • Reply 10 of 67
    .
    rob53 said:
    Doesn't surprise me. Netflix charges a monthly fee for unlimited viewing, Apple doesn't. Of course my wife gets upset because she's watched everything and the majority of "new" movies aren't actually new releases, just new to Netflix. As @mattbookair mentioned, I would like to know how much money Netflix actually makes because they have to be paying out a lot of money. I bet my wife watches at least 30-40 movies and TV shows per month. Even at Red Box's rates, that's still around $50 while we're not even paying a $10 monthly rental fee. I can't see how Netflix is making that much money.
    Netflix pays a fixed cost for their content regardless of how many people watch it. They typically negotiate XXX amount of dollars for the rights to stream content for a specified amount of time.
    edited January 2016
  • Reply 11 of 67
    pmzpmz Posts: 3,433member
    sog35 said:
    This is too bad. Apple could have really dominated streaming video.
    You realize this is largely because of Apple devices, on which people subscribed and Apple is getting a 30% cut. They already dominate streaming video.

     :/ 
  • Reply 12 of 67
    I feel like the article doesn't get quite all the way to pointing out that this is an apples-to-oranges comparison. I'm paying Netflix to be able to stream an unlimited amount of content. Apple doesn't offer a competing service. If Netflix wants to compare their traffic to Hulu or Amazon Prime Video, that's fair. But until Apple has an unlimited-streaming service or Netflix has an a la carte rent-or-buy option, this comparison is meaningless.
    afrodri
  • Reply 13 of 67
    Apple gets 30% of Netflix revenue without the need to have the infrastructure to support a true streaming service.  I do question why Apple did not just make a Netflix clone.  I still feel that Apple is getting too cocky for its own good.  The need to always do things differently when differently may not always be better.  They have a pretty good track record I will give them that.  I assume they still want to do TV in a way they feel is right without compromises.  To a certain extent that is admirable.
  • Reply 14 of 67
    red oak said:
    Apple is getting 30% on an increasing portion of Netflix's revenue.   The Netflix app is #12 top grossing  

    this is seems to be completely under the radar
    Which is stupid. Why should Apple get 30% of the $10 I pay Netflix every month? Apple's not hosting this content. Even if one argues that Apple should get a commission for driving business to Netflix should that be a recurring monthly commission based on people's subscriptions? I would argue no. When I signed for Netflix I did so on their website so I would assume Apple is not getting a 30% cut?
    Apple only gets that cut if you subscribe through the App Store app, I believe. I signed up for Netflix long before there were iPhones, so Apple makes nothing additional from me using the app. If you signed up on Netflix.com, Apple also would make nothing from the transaction.
    nolamacguy
  • Reply 15 of 67
    jonljonl Posts: 210member
    josu said:

    Is speaking about the in app purchases, where Apple gets the 30% cut. I did it that way, easy, no need to give your credit card, you can charge your iTunes account with iTunes cards and by default is active the automatic renovation.
    I agree that in-app purchasing is super convenient. I'm just not sold on Apple taking 30% of subscription fees. Especially when the subscription price is then raised to cover the 30% like Spotify does. Does it really cost Apple $3 to process a monthly subscription fee for Netflix?
    It is completely stupid to believe Apple is getting 30% of Netflix's subscription fees. And how in the world does Apple process subscription fees for Netflix? Netflix bills you directly.
  • Reply 16 of 67
    pmzpmz Posts: 3,433member

    red oak said:
    Apple is getting 30% on an increasing portion of Netflix's revenue.   The Netflix app is #12 top grossing  

    this is seems to be completely under the radar
    Which is stupid. Why should Apple get 30% of the $10 I pay Netflix every month? Apple's not hosting this content. Even if one argues that Apple should get a commission for driving business to Netflix should that be a recurring monthly commission based on people's subscriptions? I would argue no. When I signed for Netflix I did so on their website so I would assume Apple is not getting a 30% cut?
    No, Apple does not get a cut of the services signed up from elsewhere, obviously. Clearly you don't understand. If subscription based products want to allow sign-up from within their iOS app, Apple gets a cut of those sign ups, and billing is managed through iTunes.
  • Reply 17 of 67
    Net neutrality is all good and well in theory but when one company sucks up that kind of Internet bandwidth we have a problem Houatom.  
  • Reply 18 of 67
    pmzpmz Posts: 3,433member
    jonl said:
    I agree that in-app purchasing is super convenient. I'm just not sold on Apple taking 30% of subscription fees. Especially when the subscription price is then raised to cover the 30% like Spotify does. Does it really cost Apple $3 to process a monthly subscription fee for Netflix?
    It is completely stupid to believe Apple is getting 30% of Netflix's subscription fees. And how in the world does Apple process subscription fees for Netflix? Netflix bills you directly.
    What are you talking about? Netflix does NOT bill you directly if you sign up for your account via the iOS App. Anywhere else, yes.

    Apple absolutely gets 30% of all subscriptions started from the Netflix iOS App. Those subscriptions and that traffic is a tremendous chunk of overall Netflix. Go look at their revenue pre and post App Store.
    SpamSandwichnolamacguylostkiwi
  • Reply 19 of 67
    Is NetFlix streaming uncompressed video ?

    People tend to stream entire movies on Netflix instead of short video clips on YouTube.
     
  • Reply 20 of 67
    jungmarkjungmark Posts: 6,870member
    This is a silly comparison. Apple streams music, which are small files. Netflix streams video, which is a couple orders of magnitude larger. It's like saying trucks "wins" the cargo transportation crown on America's highways. 
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