Point taken. In Netflix's view, they focus on a specific market niche so that they effectively compete in a smaller, less crowded space. But in analyzing their

Point taken. In Netflix's view, they focus on a specific market niche so that they effectively compete in a smaller, less crowded space. But in analyzing their business, it's not unreasonable to take into account "nearby" competitors even as they differentiate. Netflix themselves do: http://www.slideshare.net/reed2001/netflix-opportunity http://www.slideshare.net/reed2001/netflix-opportunity (slide 31). Overstating BitTorrent's influence would be a mistake, but ignoring them altogether would be a distortion as well.