In-line with the company’s “data-held-closely-to-the-vest” culture, Netflix did not offer much visibility into smartphone and tablet usage during its first quarter earnings call. However, we know that Netflix usage, particularly on tablet platforms, is significant and growing. Netflix is not only far and away the most popular subscription video app, and second only to YouTube overall in video, it also leads in overall in engagement (time spent) on tablets, with usage approaching nearly one-third of total video-viewing time during the month of March, according to Connected Intelligence’s SmartMeter. This translates into 2-1/2 hours of Netflix video viewing time per active tablet user weekly; with active users engaged in Netflix app three to four times a week, and spending on average nearly 45 minutes per session. And, that was just for the month of March. In February, Netflix tablet video-viewership did experience a bump-up (to March-levels), more significant on the iPad than on Android tablet form factors. The February bump may in part be attributed to the February 1 bulk release of all 13 episodes of Netflix’s original program, House of Cards.
Comparatively, Netflix usage on smartphones, while comprising a much lower proportion of total video-viewing time, still represented a significant 16 percent in March, which equates to less than an hour per active smartphone user weekly. Overall, connected consumers are still showing a much greater propensity to access and spend time in shorter-form content on their smartphones, which explains why YouTube comprises well over half (56 percent) of all video viewing time. Longer-form video viewing on smartphones will continue to be boosted by enhanced form factors, including larger and higher-resolution screens, such as iPhone 5, and Samsung’s latest Galaxy S4, among others, and this is reflected in video engagement trends.
The smartphone Netflix impact on network usage (Wi-Fi and cellular) is minimal – with Netflix usage only comprising 3 percent of total app data usage (and on par with YouTube). The story is different in tablets. From a bandwidth consumption perspective, Netflix was far and away the most consumptive app used on tablets, comprising nearly one-fifth of total app data usage (Wi-Fi and cellular).
From a wireless carrier perspective, there is little reason to be too concerned about the video-burden on tablets based on current tablet connectivity and consumer usage preferences. According to Connected Intelligence’s Q1 2013 Connected Home report, a significant 80 percent of the 60.8 million tablets installed are Wi-Fi only. Among the 20 percent of 3G/4G enabled tablets in market, just over half (11 percent) have an active 3G/4G data plan. Further, the dominant context for tablet video-viewing is in-home (83 percent of tablet owners), so usage is happening where Wi-Fi networks are prevalent and already available.
Carriers should watch how consumer tablet connectivity and video usage patterns evolve (outside of the largely fixed, in-home scenario) and ultimately what the cellular network impact will be, particularly as they increasingly look to encourage tablet-connect rates through simplified pricing and shared (connected device) data plans.