Netflix's catalog might be shrinking, but the company is a lot better than its competitors at wringing value from every dollar it spends on TV shows and movies, according to research from UBS.
Netflix has said it will spend a whopping $5 billion on content in 2016, including more than 30 original scripted shows. That's more than double what its closest rivals, Amazon and Hulu, spend on content, according to Morgan Stanley.
A recent chart from Morgan Stanley shows the difference since 2012:
But a note this week from a UBS team led by Doug Mitchelson suggests that Netflix not only spends more but is also a lot more efficient at spending that money.
"Amazon appears on par with Hulu in terms of programming budget efficiency, and we estimate Netflix spends its budget roughly 3x more efficiently than Amazon or Hulu," the analysts wrote. UBS arrived at this assertion by looking at how many hours of watching Netflix gets for every dollar it spends on content and then comparing that to Netflix's rivals.
Here's the chart from UBS that shows the whole picture:
As you can see, at 12.5 hours per dollar, Netflix blows away Amazon (four hours) and Hulu (3.9 hours).
Part of this could be because Netflix has a lot more reach in terms of audience size, but it could also be because its subscribers just watch a ton of Netflix.
Indeed, when UBS analysts looked at the daily viewing hours per subscriber, the differences between Netflix and the competition were significant, especially with relation to Amazon.
Here is the chart from UBS that shows daily hours of viewing per subscriber:
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