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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 Motoman on 10/21/2010 11:30:59 AM , Rating: -1
If my internet connection was the problem, why would it be that streaming video from other websites looks a lot better? Even watching TV episodes from the network's website?

RE: Blah
By Denigrate on 10/21/2010 11:43:35 AM , Rating: 2
Because you are alone in your experience, or you are a troll and lying about your experience. Do you even have Netflix?

RE: Blah
By Motoman on 10/21/10, Rating: 0
RE: Blah
By micksh on 10/21/2010 12:06:44 PM , Rating: 2
He is not alone. It is a known fact that Netflix streaming quality on PC is usually worse than quality on other devices on the same bandwidth.

It could be that Netflix does not use Silverlight efficiently when streaming to PC, or something else. There are threads about that on

If you want better Netflix quality stream to XBox, Roku or Blu-ray player with Netflix support.

RE: Blah
By Denigrate on 10/21/2010 12:41:53 PM , Rating: 2
That's horse crap as well. I stream via a PS3 and with a couple PCs and laptops, and have no issues. Works fine with low end integrated graphics and works fine with a middle of the road gaming PC with twin 24" LCD's.

RE: Blah
By Motoman on 10/21/10, Rating: 0
RE: Blah
By Copaseticbob on 10/21/2010 2:32:37 PM , Rating: 2
by physical size, they dont.
But that 67" is 1080p? So is my 23" LCD computer monitor. And most likely his/her 24" screens.
Is that 67" plasma? Thats a big tv lol.

RE: Blah
By Motoman on 10/21/2010 3:41:38 PM , Rating: 1
Yes, it's 1080p. So with the same number of pixels spread out over 67" vs. 24", any degradation in the video is going to be that much more obvious.

No, it's not's an LED DLP...which is a fabulous display. Watching DVD/Blu-Rays on it, or playing WoW, is pretty freaking amazing.

RE: Blah
By sprockkets on 10/22/2010 5:23:34 PM , Rating: 2
You don't sit less than 2 ft away from your 67" screen like you do with a 24" monitor, duh.

Just to prove you wrong, I also tried streaming. Initial start of episode of the office looked bad, then cleared up in 10 seconds once it started to see how fast it can stream.

XP suffers also from video tearing cause it sucks, Vista and 7 don't. Hope you don't still use XP.

RE: Blah
By SSDMaster on 10/21/2010 3:22:11 PM , Rating: 2
No its not horse crap... Streaming to the PC is capped at 2200Kb/s.

RE: Blah
By Spivonious on 10/22/2010 11:07:35 AM , Rating: 2
Source? This might explain the infamous stuttering issue.

"Let's face it, we're not changing the world. We're building a product that helps people buy more crap - and watch porn." -- Seagate CEO Bill Watkins
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