25% drop could confirm Hastings' 3Q fears
Netflix streaming didn’t show any significant deviance from normal levels on the first two days of the Olympics, which began last Friday. Netflix streaming in Canada was at normal levels, which Procera analyst Cam Cullen attributed to the country not being as competitive in the Olympics as the U.S. “With the peak levels that we mentioned earlier for Olymics streaming, something had to give, and in this case it was Netflix,” wrote Cullen. Reached for comment, A Netflix spokesman replied, “Even if the figures you cite are correct, one night’s traffic does not a trend make.” In his investors’ letter last month, Hastings cited the Olympics as a contributing factor in a projection of reaching anywhere between 1 million-1.8 million subscribers in the third quarter. If Netflix can’t hit the high end of that estimate, it will fall short of the 7 million total for the year projected in 2011. Cullen calculates “normal levels” by comparing streaming activity on a particular day to the average of levels on the same day over the previous two months, June and July. Procera also noted that the Olympics may have actually helped traffic on social networking hubs like Facebook and Twitter, which were up collectively by 25% during the first two days in North America alone. YouTube is also at normal levels. Cullen also credited NBC making streaming widely available for cutting down on piracy of the opening-night ceremony, which was ranked very low on an unspecified leading torrent site index over the weekend. Procera tracks broadband usage across its customers worldwides which include six of the top seven cable operators in North America, in addition to several DSL services and mobile operators.
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