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Catching Up with US Tech Stocks

PART:
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Part 9
Catching Up with US Tech Stocks PART 9 OF 10

Here’s Where Netflix Loses to Hulu

Hulu beats Netflix in causing people to cut the cord

Though Netflix (NFLX) boasts significantly more customers than its competitors in the streaming video business, it’s not a stronger cord-cutting force than its rival Hulu.

According to CNBC, citing media analytics firm M Science, Hulu has fueled the recent increase in cord-cutting. In other words, the cord-cutting rate is higher among Hulu subscribers than Netflix subscribers.

The study by M Science also found that Charter Communications (CHTR) is likely to be a major casualty of cord-cutting compared to its peers like Comcast (CMCSA).

Here&#8217;s Where Netflix Loses to Hulu

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Netflix beats cable companies by subscribers

Despite not being the major driving force behind cord-cutting, Netflix is benefiting from growing demand for online video services. For example, Netflix has more subscribers in the United States (SPY) than the country’s top cable providers combined.

Netflix revealed in its 1Q17 report in April that it had reached 50.9 million subscribers in the United States. In contrast, Leichtman Research Group estimates that the top six US cable companies, such as Comcast and Charter, had 48.6 million subscribers combined in May.

Worldwide, Netflix counts 98.8 million subscribers, as the chart above shows. Hulu, in contrast, is estimated to have 15.0 million paying subscribers.

Original programming magic

Netflix’s rapid subscriber growth is a credit to its investment in original programming, given that consumers have shown that they’re willing to pay for quality production. Other online video providers, such as Amazon (AMZN) and Alphabet’s (GOOGL), have taken a cue from Netflix.

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