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Netflix is now a streaming company that mails DVDs  (Source: Nintendo)
Reed Hastings says Netflix is now a streaming company

Netflix is one of the main reasons that so much pressure was put on traditional video retail, ultimately leading to the bankruptcy filing of Blockbuster. Netflix has been changing its business model to keep up with consumer trends that are migrating from DVDs to streaming content.

Netflix offered up its financial data for Q3 2010 this week and the company is doing very well. During Q3 2010, Netflix added 1.9 million new subscribers bringing the total number of subscribers to the service up to 16.9 million. The 16.9 million figure is a gain of 52% from the same quarter of 2009. Netflix also stated in the earnings release that 2/3 of the customers of the service now stream content, up from 41% last year and 61% in Q2 2010.

Netflix grew its revenue significantly from $431 million in Q3 2009 to $553.2 million in Q3 2010 for a growth rate of 30% compared to last year. Interestingly, the number of DVDs that Netflix sent to users by mail declined in areas like San Francisco and grew overall by only 10% despite the significant amount of new users that signed up and the growth in revenue. That is a clear indication that more and more users are streaming content only. Netflix did note that it still spends more than $500 million to ship discs.

Netflix CEO Reed Hastings said, "We are very proud to announce that by every measure we are now a streaming company, which also offers DVD-by-mail. In Q4, we’ll spend more on streaming content than DVD content, and we’ll deliver many more hours of entertainment via streaming than on DVD. More impressively, a majority of our subs will watch more content streamed from Netflix than delivered by us on DVD. DVD-by-mail shipments are still growing, but streaming for us is much larger and growing much faster."

Hastings notes that the company is able to retain more customers thanks to word of mouth marketing by customers and high customer satisfaction. The cost to acquire a new subscriber dropped to $19.81 for Q3 2010 compared to $26.86 for Q3 2009. The huge growth in streaming use also lead to Hastings stating that streaming only subscriptions could be introduced this year. Netflix also plans to expand its service to more countries.

Netflix launched its streaming service in Canada in September marking its first venture outside America. AllThingsD reports that the earnings for the quarter were very close to Wall Street expectations with non-GAAP earnings of $0.70 on expectations of $0.71, missing the mark by a penny. However, Wall Street expected revenue of $551 million, which Netflix beat with $553 million.

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RE: Blah
By kattanna on 10/21/2010 10:34:21 AM , Rating: 1
quality really depends on bandwidth.

on my 56" TV if i am getting the full 4 bars, it looks pretty good. if i dont get the full 4 bars, then yeah, not so much.

but i am also using either my xbox 360 via hdmi or the ROKU box via composite to stream directly.

but in general we still get far more content from netflix via DVD's as their streaming library, while growing rapidly from when it started, is still limited and because occasionally we will run into dumbshit stuff like out of a season of a TV show 1 or 2 episodes will be not be streamable, but DISK ONLY. which really is annoying.

overall though i can completely understand the good word of mouth netflix gets. its an awesome service.

RE: Blah
By Copaseticbob on 10/21/2010 10:41:57 AM , Rating: 2
agreed. They have a pretty impressive library for streaming. It can be tough sometimes to see whats out there because they try so hard to point out things they *think* you'll like.

Ive only ever received a DVD from them once, I stream everything.

RE: Blah
By kattanna on 10/21/2010 10:59:54 AM , Rating: 2
Ive only ever received a DVD from them once, I stream everything.

wow, really? interesting. we are on the 5 disk at a time plan and get most of what we watch via DVD's. since we dont have the pay for cable channels like HBO and such, we wait for the show to hit DVD then watch it. which we like better cause then we can blow through a season and really get into the show without having to wait week to week.

RE: Blah
By Copaseticbob on 10/21/2010 11:09:30 AM , Rating: 2
I do the same, but with whats available streaming.
The entire series of 30 rock is available streaming, the office, Archer. I havent run out of streaming content yet to justify waiting for a dvd.
Saves money too, just an internet connection, dont have to 'bundle' anything. I like that part lol.

RE: Blah
By xSauronx on 10/21/2010 11:21:07 AM , Rating: 3
I dont get DVDs anywher near as often as I used to. Im on the one at a time plan, and stream most of what I watch. Usually I reserve my discs for blu-rays that I care about seeing in high-def

RE: Blah
By kleshodnic on 10/22/2010 10:52:21 AM , Rating: 2
If you are finding it tough to find content you would like via Netflix streaming then try the netflix gems thread @

It's where I have been going to find movies that I would other wise never have seen.

"Vista runs on Atom ... It's just no one uses it". -- Intel CEO Paul Otellini
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