Post by Skaggs on Apr 24, 2009 8:12:51 GMT -5
Buried in the following article is a statement about Netflix adding Saturday processing to all of its 58 fulfillment centers by the end of the year.
Currently, Netflix only processes DVDs Monday-Friday.
Netflix Q1 profit jumps 68%
Subscriber growth, earnings beat January forecast
By Danny King -- Video Business, 4/23/2009
APRIL 23 - Netflix first-quarter profit and subscriber growth beat its own forecast as the company's video-streaming service appeared to have attracted more customers than expected. The company also said it would boost spending on its video-streaming service this year and planned to have its digital-delivery software embedded in most consumer-electronics components within a few years, though quashed talk of a streaming-only subscription option.
Net income jumped 68% to $22.4 million, or 37¢ a share, from $13.3 million, or 21¢, a year earlier, as sales rose 21% to $394.1 million. The company's subscriber base grew by a record 920,000 during the quarter and 25% from a year earlier to 10.31 million, the No. 1 U.S. movie-rental service via mail said in a statement today. Netflix was expected to earn 31¢ a share on $390.9 million in sales, the average analyst estimate in a Thomson Reuters survey.
Netflix has been augmenting its by-mail service with its video-streaming product and reached agreements last year to make its digital titles available for streaming through components such as Microsoft's Xbox 360 videogame consoles, TiVo digital video recorders and Blu-ray Disc players from Samsung and LG Electronics. The company plans to embed its software in most Internet-connectable consumer-electronics products within a few years, Netflix Chief Executive Officer Reed Hastings said on a conference call with analysts today.
The strategy appears to be working, as Netflix beat its January earnings forecast of as much as 33¢ a share and its subscriber forecast of as much as 10.3 million. The company today boosted its end-of-year subscriber forecast from January by 5% to about 11.5 million customers and increased its full-year earnings forecast by about 9% to about $1.64 a share.
"While its clear that instantly streaming movies..is energizing our growth, our subscribers in total are renting more DVDs and Blu-ray movies than ever," Hastings said. Further DVD-rental growth will be helped as Netflix adds Saturday operations to all of its 58 fulfillment centers by the end of the year, Hastings said.
The company, which has estimated that subscribers for its DVD-delivery service will peak between 2013 and 2018, pegs its digital inventory at more than 12,000 titles, though blog HackingNetflix.com said last week that the number might be closer to 15,000.
Still, Hastings said a streaming-only subscription option was unlikely anytime soon, noting that since most of Netflix's digital titles are older, almost all of the subscribers who stream content also order DVDs by mail in order to get newer titles.
Since last week, at least three financial analysts said Netflix stock was overvalued, citing issues such as a 60% surge in share price this year, increased competition from Google's YouTube and the News Corp.- and NBC Universal-owned Hulu and the fact that Netflix doesn't charge extra for its streaming service.
Hastings also suggested that studios lower pricing on Blu-ray titles, noting that the 20% to 25% subscription-price premium Netflix is instituting this month for those who want access to Blu-ray titles is still less than the extra amount some studios charge Netflix for such titles. About 1 million Netflix subscribers were using the Blu-ray option as of last month, up from about 700,000 subscribers at the end of last year, while the company had widened its selection of Blu-ray titles in the previous six months by 60% to about 1,300.
Hastings added that while more customers who cancelled their subscriptions cited $1-a-night movie-rental kiosks, the rapidly growing sector was still more of a threat to brick-and-mortar stores because of the focus on newer titles.
"The long-term effects of ubiquitous $1 DVD rentals are not positive for us or for the industry as a whole," Hastings said. "By the end of the year, kiosks will be our No. 1 competitor."
Currently, Netflix only processes DVDs Monday-Friday.
Netflix Q1 profit jumps 68%
Subscriber growth, earnings beat January forecast
By Danny King -- Video Business, 4/23/2009
APRIL 23 - Netflix first-quarter profit and subscriber growth beat its own forecast as the company's video-streaming service appeared to have attracted more customers than expected. The company also said it would boost spending on its video-streaming service this year and planned to have its digital-delivery software embedded in most consumer-electronics components within a few years, though quashed talk of a streaming-only subscription option.
Net income jumped 68% to $22.4 million, or 37¢ a share, from $13.3 million, or 21¢, a year earlier, as sales rose 21% to $394.1 million. The company's subscriber base grew by a record 920,000 during the quarter and 25% from a year earlier to 10.31 million, the No. 1 U.S. movie-rental service via mail said in a statement today. Netflix was expected to earn 31¢ a share on $390.9 million in sales, the average analyst estimate in a Thomson Reuters survey.
Netflix has been augmenting its by-mail service with its video-streaming product and reached agreements last year to make its digital titles available for streaming through components such as Microsoft's Xbox 360 videogame consoles, TiVo digital video recorders and Blu-ray Disc players from Samsung and LG Electronics. The company plans to embed its software in most Internet-connectable consumer-electronics products within a few years, Netflix Chief Executive Officer Reed Hastings said on a conference call with analysts today.
The strategy appears to be working, as Netflix beat its January earnings forecast of as much as 33¢ a share and its subscriber forecast of as much as 10.3 million. The company today boosted its end-of-year subscriber forecast from January by 5% to about 11.5 million customers and increased its full-year earnings forecast by about 9% to about $1.64 a share.
"While its clear that instantly streaming movies..is energizing our growth, our subscribers in total are renting more DVDs and Blu-ray movies than ever," Hastings said. Further DVD-rental growth will be helped as Netflix adds Saturday operations to all of its 58 fulfillment centers by the end of the year, Hastings said.
The company, which has estimated that subscribers for its DVD-delivery service will peak between 2013 and 2018, pegs its digital inventory at more than 12,000 titles, though blog HackingNetflix.com said last week that the number might be closer to 15,000.
Still, Hastings said a streaming-only subscription option was unlikely anytime soon, noting that since most of Netflix's digital titles are older, almost all of the subscribers who stream content also order DVDs by mail in order to get newer titles.
Since last week, at least three financial analysts said Netflix stock was overvalued, citing issues such as a 60% surge in share price this year, increased competition from Google's YouTube and the News Corp.- and NBC Universal-owned Hulu and the fact that Netflix doesn't charge extra for its streaming service.
Hastings also suggested that studios lower pricing on Blu-ray titles, noting that the 20% to 25% subscription-price premium Netflix is instituting this month for those who want access to Blu-ray titles is still less than the extra amount some studios charge Netflix for such titles. About 1 million Netflix subscribers were using the Blu-ray option as of last month, up from about 700,000 subscribers at the end of last year, while the company had widened its selection of Blu-ray titles in the previous six months by 60% to about 1,300.
Hastings added that while more customers who cancelled their subscriptions cited $1-a-night movie-rental kiosks, the rapidly growing sector was still more of a threat to brick-and-mortar stores because of the focus on newer titles.
"The long-term effects of ubiquitous $1 DVD rentals are not positive for us or for the industry as a whole," Hastings said. "By the end of the year, kiosks will be our No. 1 competitor."
