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Preference for Internet-Connected Devices a Boost for Netflix


Aug. 11 2015, Updated 9:07 a.m. ET

More people prefer Internet-connected devices over TV

During its 2Q15 earnings call, Netflix (NFLX) said that it intends to take advantage of innovations in Internet-connected devices. Why? Because Internet-connected devices are now the consumer’s preferred means to watch Netflix.

According to a report from comScore, and as indicated by the chart below, 44% of people prefer watching Netflix via Internet-connected TV devices. Next in order of preference are the desktop and laptop, gaming console or Blu-ray device, and the mobile device.

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Netflix gains from cord-cutting trend

The preferred way to watch Netflix is via Internet-connected TV devices such as Apple (AAPL) TV and Google (GOOG) Chromecast.

The reason more consumers are moving toward online devices is because of the cord-cutting phenomenon. These users prefer to watch content online rather than on television. Netflix stands to gain from this shift in preferences because of its original content, low streaming cost, and ad-free online streaming.

Amazon (AMZN) is competing aggressively with Netflix to grab consumers with its Fire devices. On July 16, Amazon struck an agreement with Time Warner’s (TWX) HBO NOW. This deal will allow HBO’s original programming to be available to viewers on Amazon’s Fire devices.

You can obtain diversified exposure to Netflix by investing in the PowerShares QQQ Trust, Series 1 (QQQ), which invests 0.91% of its portfolio in the stock.


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