Netflix continued on its anti-recession roll in the latest 3-month period, beating analysts’ average profit expectations. By the numbers, Netflix subscriptions were up, with 10.6 million total subscribers at the end of the quarter, representing 26 percent year-over-year growth from 8.4 million over the same period last year, and a 3 percent bump over the first quarter of this year. Netflix added more than 1.9 million gross subscribers during this latest quarter, which was 40 percent above last year, but a 20 percent dip from the first quarter.
Revenue for the second quarter was $408.5 million, which was 21 percent growth over the same time last year, and a 4 percent increase from the first quarter of this year.
During the Q&A, Hastings didn’t provide any real juicy tidbits, but here are some highlights:
While he didn’t come out and say Redbox was the company’s top competitor like he did last quarter, Hastings noted that both Netflix and Redbox were growing while video stores were on the decline. He did say that Netflix has no interest in getting into the kiosk rental business.
STREAMING ONLY SUBSCRIPTION:
No streaming-only plans yet, and content appears to be part of the reason. Said Hastings, “When we talk to subs about streaming only, they want a lot of content,” and Netflix just doesn’t have the library to provide that yet. He said that the title count hasn’t grown much for the streaming service, but he was more interested in getting the right titles rather than just a lot of them. Spending more on content licensing for streaming is still a priority for the company.
Netflix has noticed more people going towards lower-priced plans, but wasn’t sure if this was attributable to streaming or the economy. Additionally, the number of people “trading down” their subscriptions has been counterbalanced by the number of people who trade up.
As we noted earlier this morning, subscriptions are becoming a popular business model for video content. Epix is the new pay TV/broadband channel from Paramount Lions Gate and MGM. Hastings pointed out that little is known about Epix, but that Starz used to have the standalone Vongo broadband service, and ditched it in favor of providing its content to partners like Netflix.