Advertisement

Netflix Subscribers & Revenues Hit Another Quarterly High

Netflix ButtonWhile Netflix is currently in hot water with subscribers due to its recent price hike, that event happened in the third quarter of the year, leaving the company free to have a massive second quarter.

The first quarter of the year set record revenue and subscriber numbers for Netflix, and while the company expected subscriber numbers to hit 24 to 24.8 million this quarter, they blew past that number to hit 25.56 million globally.  This represented nearly two million more than last quarter, a 70 percent increase year-over-year.  The report to shareholders (PDF link) does stress that they expect to see negative impact from the price hike, and that they expect the subscriber base to essentially hold steady due to losses.  The predictions for the third quarter places subscribers in the range of  25 million domestically.

Our estimate is that by end of Q3 in the U.S., we’ll have about 22 million people subscribing to our streaming service, about 15 million people subscribing to our DVD service, and about 25 million total U.S. subscribers (with about 12 million people subscribing to both streaming and DVD).

On the revenue side of the equation, the company hit $770 million, up from the $706 million last quarter and representing a 48 percent increase over the same period last year.  The only loss shown on the balance sheet was internationally with a $10 million dollar loss, but that is to be expected as the company continues to be a relatively new player in Canada.  The expansion into Latin America isn’t expected to roll out until the first quarter of next year, but the company appears to have high hopes for that expansion.  In addition, subscribers in Canada and Latin America will also be enjoy streaming content via Facebook, but due to licensing rules in the United States, that feature will be unavailable in the United States.

With the new pricing structure that completely separates the Watch Instantly streaming service and DVD rentals, the company said that it will advertise disc-only memberships in the last three quarters of this year, the first time the company has done so in many quarters.

While it appears that the company is almost splitting itself into two now, it doesn’t see any end to the rental side of the equation, and on the streaming side it plans to continue to add more television programs such as Mad Men beginning in the next few weeks, and adding more from content providers such as MTV, Nickelodeon, Comedy Central, BET and TV Land to the mix now and in the coming months.

One of the most interesting points of the report was the company’s view of its competition.  While last quarter they were anxious to grow as fast as possible to be able to stay ahead of them, they seem a little less worried about them now, and most specifically Amazon Prime Video.

Amazon recently added thousands of films and TV shows, and includes them as a free service to subscribers of its Prime shipping service. We have vastly more streaming content, are available on more streaming devices and are purely focused on subscription video streaming. So far, we haven’t detected an impact on our business from Amazon Prime.

Lets see if they feel the same after the introduction of the Amazon Tablets which are supposed to include this service.

Overall it was another good quarter for Netflix, but if the company can keep things chugging along in the wake of their price increase remains to be seen.


Advertisement


Sean P. Aune

Sean P. Aune has been a professional technology blogger since July 2007, but his love of tech dates back to at least 1976 when his parents bought...Sean P. Aune has been a professional technology blogger since July 2007, but his love of tech dates back to at least 1976 when his parents bought...


Advertisement

Advertisement