Netflix: 55 percent of subscribers now streaming movies

Netflix: 55 percent of subscribers now streaming movies

Summary: Netflix's transition from a DVD distributor to a streaming content provider hit a notable milestone---55 percent of its nearly 14 million subscribers are now watching movies and TV via the Internet.

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Netflix's transition from a DVD distributor to a streaming content provider hit a notable milestone---55 percent of its nearly 14 million subscribers are now watching movies and TV via the Internet.

To put that streaming media figure into perspective, Netflix said that 48 percent of its subscribers watched more than 15 minutes of content in the fourth quarter. A year ago, 36 percent of subscribers watched streaming movies or TV episodes.

The company delivered the typically strong quarter as it ended the three months ended March 31 with 13,967,000 total subscribers, up 35 percent from a year ago. Netflix reported first quarter earnings of $32.3 million, or 59 cents a share, on revenue of $493.7 million, up 25 percent from a year ago. Earnings were 5 cents a share better than Wall Street targets. Revenue was in line with estimates.

Gross margin in the first quarter also improved to 37.8 percent, up from 34.2 percent a year ago. Meanwhile, the costs to acquire a customer---$21.54 per gross subscriber addition---was better than the $25.79 mark a year ago. Netflix also said that first quarter churn was 3.8 percent, down slightly from the fourth quarter.

As for the outlook, Netflix outlined the following for the second quarter:

  • Subscribers of 14.7 million to 15.0 million;
  • Revenue of $517 million to $525 million;
  • Earnings of 62 cents a share to 73 cents a share.

Wall Street was expecting earnings of 68 cents a share on revenue of $516 million.

For 2010, Netflix projected:

  • Subscribers of 16.5 million to 17.3 million, up from 15.5 million to 16.3 million previously;
  • Revenue of $2.11 billion to $2.16 billion, up from $2.05 billion to $2.11 billion;
  • Earnings of $2.41 to $2.63 a share, up from $2.28 to $2.50 per share.

Wall Street was expecting earnings of $2.51 a share on revenue of $2.1 billion.

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Topics: Enterprise Software, Banking

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4 comments
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  • Streaming ROCKS!

    Streaming movies from Netflix has all but killed our other movie purchasing. I just wish more movies would be allowed to stream. Hopefully the studios will wake up!!
    Narg
  • Streaming quality varies

    The quality of the streamed content at Netflix varies greatly. Some content looks horrible, with blocky artifacts, low volume sound, muddy color, and some looks crystal clear.

    They need to put more effort in content quality.

    That said, I stream quite a bit now.
    WindowWasher
  • Who own's / uses a tv these days?

    Why should I pay for cable when I get 90% of
    the content
    free from LEGAL streaming? Actually, I have
    friends who
    pay for usenet so they can watch anything they
    want, but
    if I were going to pay I certainly wouldn't pay
    to steal
    someone's stuff! Fortunately there is plenty
    of free
    content - anything not available on Hulu or its
    sister
    sites, I simply don't watch. That's like a
    $1,000 a year
    raise i gave myself.
    riluve
    • Not for me

      The problem is, I can't possibly stream 90% of what I want to watch from cable, maybe 30-40%. And since that 30-40% is streamable but also local why do I care to stream it? I use my PC DVR to record TV and the remainder of what I want to watch and when is not streamable. HGTV, SPIKE, TNT, USA, ABCFM, Bravo, History, DSC, TLC.
      To make matters worse, this streaming service from Netflix is very limited to what their total video inventory is, something like 20K videos of their 100K+ they have in inventory. Not really worth it to me.
      My daughter gets videos now at her job before they're released, so we get the option to watch like 6-9 new releases a week before the rest of the public does. Not a bad benefit to working at a video rental store.
      jakesty