Netflix profit up 45% in Q4, nears 10 million total subscribers

Analysts were already anticipating a killer Q4 for Netflix, and unlike practically every other company on the face of the planet, it delivered. The movie rental firm somehow managed to see net income rise to $22.7 million in the quarter, up from $15.7 million in Q4 2007. Revenue was also up by 19 percent, and subscriber growth was pegged at an amazing 26 percent. All told, the firm ended the quarter with 9.4 million subscribers, decimating its own forecast of ending Q4 with 9.15 million customers. Of course, some (Netflix included) are quick to assert that the recession has actually boosted business, with many consumers opting to stay home and rent versus taking the family out for a pricey night at the cinema. Netflix is now projecting to end 2009 with anywhere between 10.6 million to 11.3 million customers, and given all the hardware deals it keeps landing, we don't see a reason why it won't get there. Way to buck the trend, Netflix -- we needed some bright news today.

[Via AP]

[DavidJuaquin @ Jan 26th 2009 5:57PM]

Call me old fashion but I still rather download my movies........

[shugg @ Jan 26th 2009 8:27PM]

im not gonna call u old fashion, im gonna call u an imbesil. downlading movies vhs grade.,come on get with the times.,in order to save a penny is missing out on the real thing.dee dee deeee!!!!!!!!!

[Jon Nelson @ Jan 26th 2009 8:39PM]

You're missing out.

Netflix subscription (3/time) + DVD Burner + DVDFab 5 = Better than downloaded, and far more difficult to get caught

[DavidJuaquin @ Jan 26th 2009 9:02PM]

You make a great point Jon, I've truly been missing out. SIGN ME UP

[Elkin @ Jan 26th 2009 9:18PM]

and who said that "VHS" quality is the only thing out there?
I download my movies in 720p and 1080p thank you very much.. and now who is missing out?

[carl @ Jan 26th 2009 10:47PM]

imbesil? really?

[zephxiii @ Jan 27th 2009 9:27AM]

I download my movies in x264 .mkv, and i subscribe to netflix. Thinking about getting a blueray drive for the mediapc, and see what Netflix has.

[loopyoyo @ Jan 26th 2009 5:57PM]

netflix ftw

[davep @ Jan 26th 2009 6:02PM]

same here, i would prefere to download my rented flims instead of a rented disc

[Look_Around_You @ Jan 26th 2009 7:22PM]

Love my Netflix Instant Watch, and will be glad to continue to help keep their profits high.

[shugg @ Jan 26th 2009 8:20PM]

i would never wait till after media tuesday to watch a blu ray/dvd.,what losers are using this service.,netflix online blows , very low quality.,sucks compared to blu ray hard core.

[Game_playa @ Jan 26th 2009 8:50PM]

So you would steal them?

[Paul @ Jan 26th 2009 10:52PM]

Signed up to Netflix a few months ago and I can definitely say money well spent.

[Jack Storm @ Jan 27th 2009 12:06AM]

Imagine if new DirecTV boxes with Netflix HD came out ahhh

I see it now, you see a movie playing u press a netflix button and it asks you 'add to queue' or 'add to instant queue' ultimate entertainment right there.

[Static @ Jan 28th 2009 5:18PM]

7,479,000 customers by the end of 2007,By the end of 2008 they have 9,390,000 total subscribers, yet they only managed to gain 1,911,000 customers in a year after they opened their market to a preinstalled hardware base of 28 million, and that is a "potential sign of the coming apocalypse for physical media"? When the cheapest plan for unlimited streaming streaming available is near $100 a year($9 a month) it a surprise they gain profits after thier growth?


Am I the only one here that thinks this "Digital Download is the future" movement nothing but hot air and broken logic?

[Joshua Loucks @ Jan 26th 2009 5:59PM]

"Netflix is now projecting to end 2008 with anywhere between 10.6 million to 11.3 million "


2009, perhaps?

[Ray-- @ Jan 26th 2009 6:06PM]

fiscal year

[Jay Voorhees @ Jan 26th 2009 7:07PM]

Not to mention I think these numbers are flipped, unless the definition of "decimating" means "not as great as we had hoped"

"All told, the firm ended the quarter with 9.4 million subscribers, decimating its own forecast of ending Q4 with 9.15 million customers"

[therealmorris @ Jan 26th 2009 7:19PM]

You do know how numbers work right? 9.4 (or "9.40" or 9,400,000) is bigger than 9.15 (or 9,150,000)

[Jack Storm @ Jan 27th 2009 12:20AM]

LMAO Jay Voorhees

Are you not smarter than a 5th grader?

[sr @ Jan 27th 2009 2:04AM]

LOL at Jay, he doesn't even realize that he's right but so clueless as to why.

Anyway everyone should take a look at the real definition of "Decimate" and learn that it was incorrectly used here.

[Paul A. Chapel @ Jan 26th 2009 6:00PM]

All I can say is Handbrake. Netflix sent me three horribly scratched disks in a row.

[VeganFreak @ Jan 26th 2009 6:02PM]

If i want to see something, I'd rather buy it. Most stuff coming out today is such crap I'd rather not even bother trying to watch it.

[LloydChiro @ Jan 26th 2009 7:34PM]

How would you know if it is any good without first renting it?

[VeganFreak @ Jan 26th 2009 7:39PM]

I look at the ratings. e.g. Hancock 39% on rottentomatoes. Also, a horrid commercial might make a good impression. Seen the advertisement for Unborn? Yeah, I think we're done here.

[Wii60 @ Jan 26th 2009 7:50PM]

I thought Hancock was great.

Seriously, the only one who knows if a movie was good for you is you. It all comes down to personal preference sure, but do you really just want to watch the same movie over and over again?

Unless it's Short Circuit of course.

[Sisyphus @ Jan 26th 2009 6:02PM]

I just subscribed, and their service is spectacular.

Unlike Blockbuster's service, they *actually* turn their movies around in 1 business day (sending and receiving), and the watch online feature has a decent selection of shows (many TV series).

So far, I highly recommend it!

[rita hainsworth @ Jan 26th 2009 6:04PM]

...funny i just unsubscribed.

[TavisJohn @ Jan 26th 2009 6:28PM]

I just found that I can watch Hulu through my XBOX with XBMC. There are LOADS of TV series, and movies! It has been over a week sense the last time I thought, "Oh great, there is nothing on."

[Malikye @ Jan 26th 2009 7:39PM]

Sisyphus,

new subscribers ALWAYS get the royal treatment. that means they always get the new releases, if those movies are in your queue. NetFlix want you to think that it's the kind of service you'll get. BUT, after a month or two, you'll noticed that the new releases aren't coming to you has soon as you liked and those movie have a status of "long wait".

[AL @ Jan 26th 2009 9:15PM]

A while back there was a story about how Netflix was holding back on the turnaround, depending on how fast you were sending the discs back. The story goes that if you were flagged as a frequent viewer, then they would hold off sending you the next disc (usually an extra day or two), because you were cutting their margins due to increased postage fees for the month against your fixed fee. I used to be a subscriber who sent back discs within a day of them landing in my mailbox, and when that story came out I checked my rental history - sure enough, after a few months where the discs would be received within a day of me posting (the LA region USPS was pretty efficient) for about a couple of months it appeared that there was a consistent delay in the receipt, often about a day or two (ie. they would tell you they received it one or two days after actually receiving it).

After the story, Netflix changed this, and I got instant turnaround again. So, there always the chance that they might do that again to try to cut costs (although they do that anyway with the download service - no postage fees). On the whole, though, I liked Netflix (especially the download service) and only quit because I moved countries - my only regret was that I didn't get a chance to use the service over Xbox Live.

[rerichja @ Jan 27th 2009 12:44AM]

ha I just unsubscribed as well... yesterday in fact!

[Wii60 @ Jan 26th 2009 6:08PM]

Next Step: Absorb Gamefly.

Seriously, Gamefly takes like 8 days to come in.

[o29 @ Jan 26th 2009 6:16PM]

I thought it was just where I live, but yeah it usually takes me about a week between the time I send the game back and get a new one.

I definitely wouldn't mind a faster turn around.

[Musicman247 @ Jan 26th 2009 6:11PM]

I was a part of that growth. For me it was the ability to stream movies on my living room set via my Xbox 360.

[Tom Moitie @ Jan 26th 2009 6:16PM]

Xbox 360 won the day for Netflix.

[sjdurfey @ Jan 26th 2009 6:41PM]

i dont think a service that just came out 2 months ago would have had that big of an impact on the Netflix subscriber base. It will definitely help in the long run.

[The_Analrapist @ Jan 26th 2009 7:48PM]

It did just come out but I stream videos all the time now. I think that has been the bigest improvement with the new 360.

[Wii60 @ Jan 26th 2009 7:51PM]

I subscribed to the one a day after it came out. Love it.

[Wii60 @ Jan 27th 2009 4:35AM]

@shugg

I am ahead of the curve, that's why I torrent. But if I don't want to wait, streaming netflix ain't so bad.

[Fanfoot @ Jan 26th 2009 6:16PM]

Nice to see them doing well. Let's be careful not to overstate this though. Blockbuster recorded revenue of $1.2B or about four times Netflix's revenue in their most recent quarter. Sure that was down (slightly) from the previous year, and Netflix is growing, but they've got a long way to go before they displace your local video store. Its gonna be a while.

[Skrying @ Jan 26th 2009 6:36PM]

And? Blockbusters remaining dominance is a relic of the steady move towards Netflix like services. Want proof? Blockbuster spending tons of cash trying to implement the Netflix system. The problem here is that while Blockbuster slowly dies Netflix is the one being placed in nearly every entertainment center out there. Be it in an HTPC, game console, or Blu-Ray player. Their streaming service is in every important entertainment hardware related growth sector. Blockbuster is pissing their pants over that.

Blockbuster will continue to be the big guy in this "industry" for some time, but within the rental sector Netflix will experience the most growth and will also be able to cut costs continually as much of their system can be automated. Let employees = more money.

[Michael Scrip @ Jan 26th 2009 9:36PM]

> "Blockbuster recorded revenue of $1.2B or about four times Netflix's revenue in their most recent quarter."

But, Blockbuster has tons of overhead. Stores cost millions to build, and who knows how much to run... electricity, staff, etc. Netflix is a glorified post office, shipping envelopes.

The best part about Netflix: when digital streaming takes over physical rentals... they are already called "Net" Flix. Perfect name.

Blockbuster Video will always be remembered as that crusty video store, with creatures from all walks of life standing in line, with the smell of old candy and popcorn in the upsell area of the store... you know, the maze you have to walk through when you try to check out.

For me... I use Redbox for new releases... it's a dollar. And Netflix for back-catalog titles and TV shows. And as Netflix "Watch Now" expands, I will continue to subscribe.

[Fanfoot @ Jan 27th 2009 1:31AM]

Hey, I'm trying to kick physical media myself, limiting myself to stuff available via on demand either on Apple TV or Amazon Unbox on the Tivo.

But I'm not pretending that everybody else in the country is or will be doing this soon. Sure its the future, but it might be the future of 8 years from now...

[DeadPlasmaCell @ Jan 26th 2009 6:21PM]

Fantastic.. Now please increase your Blu-Ray stock... Please. I really don't want to have to cancel and go to Blockbuster (Which I've been doing lately)

[Todd @ Jan 26th 2009 6:25PM]

A few things bother me about NetFlix and I really think they need to fix these issues if they want to contue to grow. 1.. They need to get more Blu-ray new release movies. The wait for any new release movies in Blu-ray is just horrible. I have 13 movies on wait and only about 1 in 4 come off this list. Soon I will be out of older Blu-ray I want to watch and will just cancel my subscription. 2... The movies avaluable for download are pretty lame and I have noticed that some of them have been disapearing off the list, so it looks like as they add more crap, they take off the good stuff. 3.. Stop pandering to certain hardware venders... like XBOX360 and BD players for downloadable content. I have heard a rumor though that HD downloads will be available for PCs soon... hopefully VERY soon. 4... Transfering to a farther warehouse is just retarted as it takes an extra 2-3 days to get a movie that way... they should have a way to turn it off. 5.. Also if they send a damaged disk they should automatically send out extra movies to make up for the delay.

[CaptSaltyJack @ Jan 26th 2009 6:29PM]

6. Add subtitles to Instant Watch titles (they're working on it).

[Mike @ Jan 26th 2009 6:37PM]

6. Add subtitles to Instant Watch titles (they're working on it).

Absolutely. Though, they've already mentioned that it will take a considerable amount of time before that's available. It probably won't happen until the end of 2010.

[Platinum_Skeet @ Jan 26th 2009 6:27PM]

Xbox 360 had a lot to do with that...

[Platinum_Skeet @ Jan 26th 2009 6:28PM]

And Tivo too...