Netflix original content a 'good fit' for its increasingly TV-centric users

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Netflix (Nasdaq: NFLX) subscribers that only consumes Netflix content via streaming increased by 72 percent in fourth quarter, compared to the same quarter in 2010, according to a new report, adding that TV had become a larger portion of subscribers' streaming diets as well, increasing 10 percent year-over-year.

And, said Interpret, an entertainment, media and technology market research firm in its report, 2012 for Netflix: Where It Can Succeed and Where It Can Fail, the company saw a decline of 6.4 percent from a year ago in the number of movies it streamed.

But, Interpret said Netflix's push into original content "is a good fit for its television-enthusiastic subscribers."

Netflix last month launched an original eight-episode series from Norway called Lilyhammer. The crime comedy/drama was rolled out with every episode immediately available, catering to the Netflix users' penchant for marathon viewing. Next up is the Kevin Spacey vehicle House of Cards, which will be followed by a revival of Arrested Development. Netflix said it expects to expand its original content queue considerably in coming years.

Still, the reduction in streaming movies doesn't mean Netflix consumers have abandoned the site for films, the company said.

"There is still strong demand for new content," said Stephanie Sutton, Interpret analyst and author of the report. "The addition of recent movie releases, along with the current and upcoming original programming, can help Netflix retain customer satisfaction and, more importantly, its customers."

This month, Netflix lost access to content from Starz; its long-term deal with the content provider expired at the end of Feruary.

Netflix has steadily been growing its catalog of television shows, which now make up more than half of all its viewing, and it's a major reason the service has been able to keep its streaming subscriber base, which now stands at 21.7 million.

And, as BTIG analyst Richard Greenfield said, the loss of the content is "not the catastrophic event that everyone thought it would be a year ago."

"The cocktail party conversation in the media world is, the content's terrible," Greenfield told the Times. "And yet the average subscriber is devouring over an hour a day, every single day. Obviously they don't think it's horrible."

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