Olympics drain viewers from Netflix; CBS ready to up content

Netflix (Nasdaq: NFLX) is disputing it, to an extent, but it seems pretty certain that the streaming-video provider is not a summer Olympics winner. Only the margin of defeat is in question.

Reed Hastings


A report from Procera Networks estimated that Netflix viewership was down by 25 percent since the game began in London, an apparent reinforcement of a prediction that Netflix CEO Reed Hastings suggested would happen when he discussed second-quarter earnings recently.

Hastings, at the time, told analysts that his company would likely see lower-than-normal viewing levels while the world was riveted to the Summer Games in London and thus predicted a business downturn for the current earnings period.

Procera said its tracking showed Netflix streaming was "unchanged from normal in Canada, but was down 25 percent in the U.S. on Sunday from normal levels … as the U.S. is much more involved in the Olympics than Canada, and with the peak levels that we mentioned earlier for Olympics streaming, something had to give, and in this case it was Netflix."

A Netflix spokesman said this wasn't quite right. In an e-mail to The Huffington Post, the company said that U.S. traffic was down, but only by single digits and that Procera's analytics "may not have accurately measured all of the traffic going through Netflix's website."

Procera, meanwhile, said that its data was taken from "specific network operators that have deployed our solutions" and is "specific to our customer deployments," the Post item said. Procera also told The Huffington Post that the dip in Netflix viewership corresponded with a rise in other online viewing of Olympics materials across "a mix of large and small customers, cable and DSL."

In more upbeat news for Netflix, CBS President-CEO Les Moonves said a contract renewal in 2014 between his broadcast network and Netflix is "preordained" and that the "relationship with (Netflix) is so good we will be adding titles such as "CSI Miami," which just came off our schedule."

Moonves based his enthusiasm on how "exceedingly well" the CBS "Star Trek" franchise has done on Netflix even while "some others don't work as well."

Of course this isn't all free goodwill. "The overall bottom line will be we will get more money for this and we will have better visibility on to which shows will go into these packages," Moonves concluded.

For more:
 - read The Huffington Post story
 - see this Procera report synopsis
 - see this CBS Q2 earnings-call transcript

Related articles:
Netflix shares plunge on lower Q2 earnings, mixed subscriber results
Netflix stock drops 24% following Q2 2012 earnings report
Olympics showcase online-versus-TV competition; Apple TV quietly adds Hulu Plus