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Netflix (NSDQ: NFLX) continues to add subscribers at a fast clip, adding a record 1.7 million subscribers to its roster during its first quarter, bringing its total to nearly 14 million. That growth helped the company once again meet high earnings expectations. Revenue was $493 million, up 25 percent, compared to $394 million a year ago. Net income increased 44 percent to $32.3 million.
The company, which has been bulking up its instant streaming catalog and now has streaming deals with all three major video game console makers, also disclosed that 55 percent of its subscribers streamed a TV episode or movie for more than 15 minutes during the quarter, up from 36 percent during the same period a year ago — and 48 percent last quarter. During the company’s conference call, executives acknowledged that they had seen “some substitution” of DVD rentals for streaming. However, CEO Reed Hastings said he was still sticking to his prediction that the company would continue to ship DVDs until 2030.
In recent months, Netflix has reached deals with Universal Studios, Twentieth Century Fox and Warner Bros. (NYSE: TWX) to delay renting their new titles until 28 days after they are first available for purchase in stores in exchange for additional streaming rights. The company announced a similar deal today with HBO. Asked whether the rental windows had decreased customer satisfaction, however, CEO Reed Hastings responded by pointing out that subscriber churn was at a record low.