Thursday, July 22, 2010
So What's Netflix Up To?
Posted by Jeff Campbell in "Apple Software (OS X)" @ 04:00 AM
"Netflix's revenue missed expectations last quarter, possibly because many of us haven't laid hands upon a DVD or Blu-ray in quite some time. The number of customers streaming movies has jumped drastically from a year ago."
So 61% of it's customers (me included) are streaming video now compared to 37% a year ago. People are paying the lower $8.95 USD per month rate for one disc shipped at a time since they get to stream as much as they want, regardless which plan they are on. For me, since they don't have everything on the streaming, it makes sense to get on the family plan, which gives me some choices and my wife some choices.
But what this has done for Netflix is lowered the average cost per month about a dollar to $12.29 USD. Less revenue, which is why they didn't meet projections thus the drop in the stock of around 9% today. But it's not all gloom and doom, because they had more profit since their shipping costs went down. Double edged sword there for them. As they move to more streaming, this situation will continue I would imagine, and when it gets to the point of more selection on streaming than the regular que, I will probably re-evaluate my membership level.
In other news, Netflix is getting a PS3 version of their software ready [link] and they are also making the streaming move to Canada this fall [link]. Netflix Canada will be a bit different though, in that it will only offer streaming and not physical disc shipment. No clear reason for this, but speculation is they want to save on infrastructure as well as shipping costs as they make the move into Canada, but also it's thought they may want to avoid the hassle of Canadian content laws when it comes to physical media. Perhaps the streaming avoids this, but it seems rather odd they would let this slip through when they wrote the law. Or the law is out of date. You can view the Canada Netflix press release here.
Netflix is really making some good moves, I hope it continues because I'm a big fan of their service.