MoffettNathanson estimates that Netflix generates less revenue per hour of content viewed by subscribers than other major SVOD platforms. That's a lot for their customers. In the fourth quarter, Netflix generated an average of 34 cents in revenue per hour of content watched by its subscribers, lower than any of its competitors. By comparison, Disney+ generated 40 cents in revenue per hour watched by consumers.

Looking at platforms like Warner Bros. Discovery (Max and HBO linear) or Paramount+, the cost is even higher - they took in 76 cents and 68 cents respectively. Only Peacock comes close to Netflix's level at 35 cents.

Let's try to figure out why Netflix is doing so well and why they can implement this kind of idea. First of all, Netflix is a leader in the streaming market, a trendsetter, number one in terms of content watched by its customers.

In 2024, Netflix streamed 568.4 hours of content per average US subscriber. In second place, way down the list, was Hulu with 374 hours, followed by Disney+ (218.1), Peacock (216.9), Warner Bros. Discovery (169.6) and Paramount+ (142.0). These figures show how much of the market has been taken over by Netflix. Its leadership is unassailable.

Robert Fishman, a media analyst at MoffettNathanson Research, points out that Netflix's success and revenues are, of course, influenced by its large subscriber base and extensive, long-standing experience in creating offers and selling advertising. It is therefore difficult for competing video streaming platforms to achieve the same results. Netflix's overall revenue is affected by the variety and size of its library of attractive content and its ability to juggle bundle prices. 

It's interesting to note that Peacock earns most of its revenue from advertising for content viewed, at 27 cents. This is almost half of the streamer's revenue and the reason why Peacock comes close to Netflix in terms of revenue from subscription fees per viewing hour (35 cents vs 34 cents).

To get a general idea, we can compare some of the big players: Paramount+ and Hulu (on demand) are at 15 cents and 14 cents respectively when it comes to advertising revenue per viewing hour. WBD (Max & HBO) is at 9 cents and Disney at 4 cents. Netflix is only at 3 cents, but multiply that by their huge number of subscribers and viewers and you can see where their huge profit comes from.

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#SzymonKarbowski #StreamVX #Netflix #MoffettNathanson #WBD #Paramount #Hulu #Disney

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