Netflix makes its college mark

Just because college students are strapped for cash does not mean they are giving up on television.

In fact, some of them are even opting out of buying televisions because they watch programming on their computers.

Recent USF graduate Amy Mariani said she is eschewing a television in favor of streaming content online to her computer.

“For the longest time I did not have a TV, and in the process of buying a new one, I held off because I had Netflix,” Mariani said.

According to technology and social media website mashable.com, Mariani is one of 23.6 million people who subscribe to Netflix. In fact, the California-based company made $60 million during the first quarter of this fiscal year thanks to its instant-watch service that allows customers to stream television shows and movies over the Internet.

The service, which debuted in November 2010, also gives viewers more places to watch since shows can stream to computers, televisions and other smart devices.

Christina Hurley, senior account executive of local media client services for the Nielsen Company, said trading the television for other screens is an increasingly popular trend among 18-49 year olds.

“[Netflix] is out there, people are using it, and it’s taking away from viewing being done on television stations,” Hurley said.

To measure this, Hurley said the Nielsen Company monitors television usage by randomly sampling HUT – Households Using Television.

However despite it’s convenience, Hurley said Netflix’s streaming service is actually hurting many parts of the entertainment industry.

“Right now, any of the viewing or anything that’s being done with Netflix is contributing to non-HUT,” said Hurley. “It’s basically competing against any of the broadcast stations or any of the cable networks on television.”

Peter Howard, director of news and digital media at USF and former news and special projects team leader for TBO.com said cable channels are suffering the most.

“Netflix has impacted cable subscription services such as HBO, Showtime and Cinemax,” Howard said. “The advancements in technology have made it easy for companies like Netflix to stream right to your computer or your cell phone, and in this economy, that really appeals to consumers who just don’t have the money to buy cable [subscriptions].”

Mariani thinks the ease and convenience of streaming is most enticing.

“With a lot of students working, it lets them watch what they want on their time,” Mariani said. “And there are no commercials, which I love.”

But Hurley said the television networks do not favor the lack of commercials on Netflix because it reduces the price per television advertisement to accommodate for advertisements on other media platforms.

“They’re selling their airtime based on ratings, and it is all based on a cost per point,” Hurley said. “So the client’s are losing revenue because they’re competing with these other sources that are out there to consume television.”

According to the Financial Times, the on demand service now accounts for a third of new Netflix subscriptions – a trend Forbes.com says is growing among subscribers.

In a January 2011 study, the Nielsen Company reported that Netflix users spent 11:08 (hh:mm) watching shows online, beating out competitors like Hulu and YouTube to be the highest Time per Viewer video brand in the study.

Mariani said that while she uses other video streaming Web sites like Hulu and YouTube to look up specific video clips, she prefers Netflix because it offers full seasons of her favorite shows every day.

Mia Shuler, a USF junior majoring in magazine journalism, agrees.

“I use Netflix more often because Hulu tends to take videos [offline] after a while,” Shuler said. “I know that whatever shows I want to watch I can find every single episode [on Netflix] and not worry about the site taking it down.”

Unlike Netflix, Hulu relies on advertising sales to maintain its free online service.

As a result, Hulu earned $260 million last year, while Netflix gained $2.16 billion, according to the WSJ.

The Journal also stated that Hulu CEO Jason Kilar’s concerns about Netflix’s successful ondemand feature caused Hulu to reduce the monthly cost of Hulu Plus, a paid version of Hulu that allows users to watch complete television series on multiple devices.

In January, the New York Times reported three million new subscribers joined Netflix during the last fiscal quarter, raising the total number of users to 20 million.

But Mariani said she is sticking with what she knows.

“If I am just looking to watch ‘South Park’ and just zone out, I am going to find it on Netflix.”

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