Netflix Subs Surpasses 12 Million, Helped By Streaming Deals

Netflix was able to fulfill its high expectations for Q4, thanks in part to the addition of 17,000 streaming video titles via the movie-renter’s deal with Sony (NYSE: SNE) Corp.’s Playstation 3. The company added 1 million net new subscribers in Q4 — the most in its 11-year’s of existence — in part, as a result of its expanded streaming efforts. Netflix (NSDQ: NFLX) is likely to see more momentum in Q2, as it prepares a similar streaming video arrangement with Nintendo for the Wii this spring. So far, by the end of Q4, Netflix had exceeded 12 million total subscribers, representing 31 percent year-over-year growth. While the streaming video rentals have gotten Netflix a great deal of attention, especially as its chief rival Blockbuster (NYSE: BBI) just revised its Q4 earnings projections downward, CEO Reed Hastings continues to emphasize that the DVD business is still the main focus.

Since streaming is not the be all and end all for Netflix — at least not for another few years — the company did offer some brief details about audience usage habits. The percentage of subscribers who streamed for a TV episode or movie for more than 15 minutes during Q4 was 48 percent of total subs. The same time last year, that number was 28 percent, while 41 percent “watched instantly” for at least 15 minutes during Q3.

Subscriber acquisition costs during Q4 were $25.23 per gross subscriber addition. That was about a 5.4 percent reduction from $26.67 for the same period of ’08 and compares favorably to the $26.86 it cost in Q309. Meanwhile, Q4 Churn was 3.9 percent versus 4.2 percent in Q408 and 4.4 percent for the third quarter of 2009.

The company offered a brief outlook for Q1, expecting that it will sign up somewhere between 13.5 million to 13.8 million total subs.