Yesterday Netflix announced its third quarter earnings, and much to everyone’s pleasant surprise, the company again beat all predictions. The company ended the quarter with 16,933,000 subscribers, a growth of 52 percent year-over-year, and a growth of 13 percent from the 15,001,000 subscribers they had at the end of the quarter. The addition of 1,932,000 in the third also showed growth has picked up as in the same quarter last year the company only added 510,000 new subscribers in the same time period.
As for revenue, the third quarter of 2010 was a total of $553.2 million, which was a 31 percent year-over-year growth from $423.1 million for the third quarter of 2009, and 6 percent sequential growth from $519.8 million for the second quarter of 2010.
Where it gets interesting is when you look at what the company wants to do in the future. Two significant hints were dropped in the company’s management notes that accompanied its filing with the Securities and Exchange Commission. On the note of whether or not the company might finally offer streaming-only subscriptions, “Pure streaming could become our core offering in the USA, and DVD would be offered as a supplement for an additional charge, like we offer Blu-ray today. We’ll know by the holiday season if consumers would prefer this more streaming-centric approach.”
The other major change could come in the form of expanding outside of the United States and Canada. “If we continue to gain confidence in a large return on our Canadian investment, and we have confidence in the financial return on further geographic expansion, then we’ll look to grow beyond North America starting in the second half of 2011. In that case, we would invest approximately $50m for beyond-North-America expansion in the second half of 2011, and our addressable market would increase significantly.”
It definitely looks like the concepts of the company being a DVD-by-mail company only in the United States are definitely going by the way side. The only questions now are how much a streaming-only subscription would cost in the USA and what other countries they are eying for expansion.
What say you? What countries do you think Netflix might target next?
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