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Netflix Q1 results: 3 million new streaming subscribers worldwide, record viewing hours
Netflix has posted its earnings report for Q1 of 2012, and reveals its streaming subscriber count in the US is currently 23.4 million, after reaching 21.67 million back in January. While the company noted a net loss of about $5 million, the letter from CEO Reed Hastings and CFO David Wells claimed it is still on a "rapid return" to profitability after last year's missteps and international expansions. Worldwide it now counts a total of 26 million subscribers to the streaming service, although it lost another million or so subscribers to discs, which currently number 10.09 million. That old disc business is still highly profitable however, adding $146 million to the bottom line. Internationally, Netflix added more customers in its first three months of UK / Ireland availability than it did in the same period for Latin America or Canada, and expects its Canadian service to be profitable a quarter earlier than expected. Reed Hastings also took the opportunity to toss another barb at Comcast for its bandwidth cap-exempt Xfinity TV Xbox 360 app, claiming it should either raise its caps, make them apply to all services including its own or eliminate them entirely. Another development in Q1 was the loss of streaming titles from Starz but it claims that caused no discernible change in viewing or subscriber hours, while customers continue to lean towards streaming TV episodes over movies. Hit the source links below to paw through the PDF and spreadsheet for yourself, we'll let you know if any interesting tidbits are revealed on the earnings call later today.
Reed Hastings takes Comcast to task for skirting net neutrality
Netflix CEO Reed Hastings let loose a mini rant on Facebook Sunday, setting his sites squarely on Comcast and its data accounting practices. Highlighting one of the arguments for net neutrality, Hastings pointed out that viewing streaming videos using the Comcast Xfinity app on his Xbox doesn't count against his monthly cap, but other services do. "If I watch last night's SNL episode on my Xbox through the Hulu app, it eats up about one gigabyte of my cap, but if I watch that same episode through the Xfinity Xbox app, it doesn't use up my cap at all." It's slightly odd that different rules would apply to the same device using the same connection to stream the same content from different sources -- and exactly the sort of preferential and self-promoting behavior that net neutrality advocates are afraid will become the norm in an unregulated market. Of course, Hastings is also irate because his own company would love the same preferential treatment, but hasn't been able to close any deals. For the full rant hit up the source link.
Netflix is looking for a new Chief Marketing Officer, if you think you can do better
Considering how 2011 progressed for Netflix, it's not entirely surprising to hear some changes are in store at the top when it comes to marketing and communications. The video rental giant announced that its Chief Marketing Officer of the last dozen years, Leslie Kilgore, will be taking a position on its board as a "non-executive director", replaced in the interim by Jessie Becker as it conducts an external search for a permanent replacement. Also shifting positions is Jonathan Friedland who will be the new Chief Communications officer, and both Becker and Friedland will report directly to CEO Reed Hastings. Netflix's relationships with its customers were definitely damaged by last year's price hike and the shocking Qwikster spinoff announcement / unannouncement that followed, with a slate of original content on the way and some changes in store for its content licensing, we'll see if it can get the magic back in 2012 -- we're not so sure that the latest round of ads featuring beavers and hamsters (one's embedded after the break) are the way.
Editorial: Reed Hastings' Netflix spinoff isn't about DVD success, it's about hedging the stream
If you've just casually glanced over the mass reactions to Reed Hastings' decision to split the DVD-by-mail business of Netflix into its own brand and company, you've probably been duped into thinking that it's the second questionable move that the world's most famed movie delivery service has made this year. But is it? Is a man who turned a red envelope into a symbol of near-immediate gratification really a moron? Did he really just bury the company he worked tirelessly to create? I highly, highly doubt it. Knee-jerk reactions are always fun to watch, but they're rarely on-point. As with most things in life, the truth usually resides somewhere in betwixt the extremes. And in the case of Qwikster -- the DVD-by-mail service that precisely no one asked for -- the truth is hiding in exactly the place that Reed said it'd be: the future.
Netflix spins DVD-by-mail service off into Qwikster, says it's 'done' with price changes (video)
Over on Netflix's official blog, company head Reed Hastings has announced in a surprisingly humble blog post and video (embedded after the break) that it's splitting the DVD-by-mail business away into a new venture dubbed Qwikster. While the recent price changes already split the cost for each service, when this takes effect in a few weeks it will result in two different websites, two different sets of movie ratings and queues, and two different charges on customer's bills. He admits two separate sites may make it more difficult to manage a presence on both, but says dropping the need for compatibility between the two will enable new features to balance that out. Another change? Netflix Qwikster (is there anything good about that name?) is getting into video game rentals, available for an extra charge similar to the existing Blu-ray disc option. While the blog post blames a lack of communication for much of the backlash (and obviously cancellations), it's about to become very clear that Netflix is "primarily a streaming company." Also mentioned is "substantial" additional streaming content coming in the next few months. Whatever the company calls itself, charges, or changes on its website, if Netflix wants to talk its way back into subscriber's good graces, starting with something new to watch is the way to do it.
Netflix CEO Reed Hastings joins Facebook's Board of Directors
News that Netflix's CEO Reed Hastings is joining the Board of Directors for Facebook should make for an interesting note in the next movie, but beyond that it's unclear what it means for either company. Hastings successfully navigated Netflix through the process of going public which many assume will be a next step for the social media giant, so his experience could come in handy, and also serves on the board of Microsoft, which owns a stake in Facebook. That goes without mentioning plans by Netflix to make another run at integrating social features into its movie service after the original implementation fell apart and Warner Bros. recently offering video on-demand through Facebook. Other than facing a lawsuit from Paul Allen, Netflix and Facebook share an intense public backlash whenever either one changes their homepage, but we're not sure how he could help there -- have you seen the redesigned Netflix.com?
Netflix: 'we're going to continue our international expansion next year'
Three months after Netflix invaded Canada with a bizarre combination of paid actors and $8 instant streaming plans, CEO Reed Hastings the company has declared the move a success and says it will expand its service to other countries in 2011. "Based on the early success of Netflix.ca we're going to continue our international expansion next year and we're going to allocate significant dollars to it," spokesman Steve Swasey told The Canadian Press, without specifying which territories or how many might be blanketed with Albanian soldiers next. However, Canadians and others hoping to get an experience completely on par with the original US service shouldn't hold their breath, as Swasey says there are no plans to establish a movie queue for the streaming-only service, calling it a "strategic decision." Update: The above quotes were attributed to Netflix's Steve Swasey, not CEO Reed Hastings. Our bad.
Netflix CEO says consumers just aren't interested in long-form video on portable devices
We were undeniably excited about Netflix coming to the iPhone and iPad, but according to CEO Reed Hastings -- who spoke on the subject during a Web 2.0 Summit panel discussion -- that move has actually had little impact on the company's business. In his mind, these results indicate that consumers just aren't interested in streaming long-form video on mobile devices and instead prefer the experience on bigger screens. To support his conclusion, Hastings cited how Netflix integration on the Xbox 360, PS3, and Mac significantly grew its subscriber base. While we personally disagree with his judgment on mobile and grant him honorary captain obvious credentials for his bigger screen preference remarks, we'll still entertain the possibility that Hastings may know somethings we don't. That's not to say the phrase correlation does not imply causation isn't tickling the back our throat though. But what about you, reader? Are you taking advantage of the little red app on your Apple portable devices or even on your new Windows Phone 7 handset? Hit the poll on the next page to tell us what's up.
Netflix 'now primarily a streaming company,' could offer DVD-less plan this year
It seems like just yesterday we were celebrating Netflix's 2 billionth disc sent, but in announcing the company's Q4 financial results, CEO Reed Hastings called his baby "primarily a streaming company that also offers DVD-by-mail." Other notes include an indication that a streaming only plan for US customers, mirroring its offering in Canada, currently in limited testing could become widely available later in the fourth quarter of this year, with a potential that "pure streaming" could become the core package for Netflix going forward while DVDs might require a premium service charge like Blu-ray does now. So what comes next? If all goes according to plan, expansion beyond North America in late 2011, continuing to add more streaming content and improving the UI on other devices.
Netflix CEO looking into streaming-only option for US 'over the coming months'
Netflix CEO Reed Hastings may be stumbling over a publicity misstep or two since launching in Canada just yesterday, but he sure knows the right mea culpa to give. In a blog post entitled "Apologies" -- which, amusingly enough, is published just after "We Blew It" -- the King of the Red Envelope says, "we are looking at adding a streaming-only option for the USA over the coming months." No prices are discussed, but our educated guess would place it parallel to Canada's streaming-only plan, $7.99 monthly. Would we be willing to drop all physical media in exchange for at least one extra dollar per month? Now that's a good question.
Netflix to launch streaming-only service in Canada Wednesday
Get ready Canada, Netflix CEO Reed Hastings is reportedly due in Toronto Wednesday to kick off Netflix streaming service to your country. You'll be the first to experience Netflix as a strictly digital service, with no discs by mail of any kind involved. We'd speculate further on the pricing, but right now we just don't have the heart, or the ammunition, to make any exchange rate jokes.
Netflix survey inquires about iPhone streaming, even though CEO says 'not coming soon'
Today's movies-in-motion tidbit comes courtesy of Mike over at the Hacking Netflix blog, who let us know that some of his readers are receiving the popup survey above. It inquires as to the reader's interest in a form of Netflix streaming (Wi-Fi only, unsuprisingly) for the iPhone. That's the same streaming for iPhone/iPad that Netflix CEO Reed Hastings called "not a priority" and "not near-term" as recently as last month. While it's tempting to see this survey as a sign of an imminent iPhone or iPad app full of streaming movie delights -- assuming such an app would make it into the App Store through Apple's "user confusion" gauntlet, which is by no means a sure bet -- don't throw away your iTunes gift cards just yet. The first hints of Netflix's upcoming Wii streaming capability, which is due to launch sometime this spring, also appeared in a survey on the company's site... back in March of 2009, almost 10 months before the announcement of the Wii feature. While such a feature would be quite popular (all of the game consoles have some streaming functionality already, and two-thirds of subscribers have used the service), it seems like we may have a while to wait. Read on to see the full survey text. [H/T 9to5Mac]
Nokia, Nintendo, Netflix and E-Ink respond to the iPad
We're sure just about every company on the map has an opinion on Apple's new device, but a few big wigs have taken time out of their busy schedules to weigh in on the device. These are their stories. Nokia's Mark Squires, Head of Social Media, was mainly confused by Apple's statement that it's the biggest mobile device manufacturer, surpassing Nokia in combined revenue on media players, phones and laptops. Mark argues that the accepted definition for "mobile devices" excludes laptops, and goes on to mention the undisputed fact that Nokia's still number one when it comes to number of devices sold. Netflix CEO Reed Hastings, meanwhile, says that mobile devices aren't a priority for his company yet. They're fighting the good fight of the large screen, and once they feel comfortable in their various efforts there, then they'll move on to small screens. Netflix hasn't done or submitted an iPhone application, but Hastings did mention that he was optimistic that if Netflix did get into the game, the app would be approved for the App Store, and that it would run on both the iPhone and iPad. Satura Iwata, president and CEO of Nintendo, took a much more directly critical approach to the device, calling it a "bigger iPod Touch," and that Apple delivered "no surprises." In the same interview he expressed skepticism as to the value of bringing a high definition Wii on the market, as well as expressing doubts about 3D glasses-based gaming. Iwata is clearly a tough man to please. Perhaps most threatened by the iPad is Russ Wilcox, CEO of E-Ink. He says dedicated e-readers will outsell iPads due to "simple economics," and that the iPad is "great entertainment device," but it's "not the world's best reading device." His criticisms, mostly in juxtaposition to Kindle-style devices, abound, including price, weight, backlight and so on. He's right on the money about the shortfalls of a straightforward comparison, but we wonder if consumers will feel the same? Nothing too salacious, unfortunately, and most of the points raised are pretty spot-on -- though we do wish Reed Hastings would rethink his priorities just a smidgen and get Netflix onto mobile devices sooner than later. We're needy like that.
Netflix celebrates Q4 success of 1 million new subscribers and eyes bigger growth ahead; Roku too
At our last update after Q1 '09, Netflix had just triumphantly smashed through the 10 million customer barrier, although that's well in the rear view mirror now that the company is celebrating the addition of 1 million customers in the last quarter alone. With a subscriber base of 12.3 million (48% of whom have checked out a movie on Watch Instantly last year) its next step is to expand beyond U.S. borders, with plans to offer a streaming-only package to an unnamed new country in the latter half of this year; Hacking Netflix guesses Canada or even the UK could be potential expansion targets. Even the possibility of a Disney/Starz fallout affecting streaming didn't dampen the mood, during the earnings call CEO Reed Hastings seemed confident it could keep doing deals for compelling movies going forward, with WB, Sony, MGM, Paramount and others either signed up or renewed during Q4 alone. Still, don't expect those dealings to extend to new releases -- Hastings is comfortable sticking with a cable-like viewing window for internet delivered movies in combination with the existing disc rentals, for now. Even Roku, closely tied to Netflix's internet-to-TV efforts since they began, is thinking big. As CEO Anthony Wood tells Bloomberg, we can expect the box itself to reach the low, low price of free sooner rather than later as the company works out revenue sharing deals with various subscription and video on-demand services, bringing it up to "the same kinds of channels that any cable operator can offer." It's set goals of 1 million set-top boxes sold by the end of the year (already over 500,000) and 100 channels, we figure another half-off sale or two should get things done in no time.
Reggie Fils-Aime: Wii users don't care for Netflix HD
We seriously have to question the sanity of some of these high-ranking corporate types. Reggie Fils-Aime, Nintendo of America boss and fearless orator, has joined Andy Rubin of Google in claiming that his customers do not require a feature so prevalent nowadays that it has become close to a basic standard. While the Xbox 360 and PS3 are capable of streaming full HD movies from Netflix at no extra cost, Reggie has stated his belief that "there really is no loss for the Wii consumer" because "the vast majority" of Netflix streaming content isn't HD anyway. Reiterating his longstanding, but never adequately explained, hesitance toward HD, Reggie has also claimed that the 26 million Wii console owners out there have voted with their wallets and will be quite happy to continue putt-putting along at standard def. Skip past the break to see him speaking his heresy with a straight face.
Chances of Netflix on Nintendo 'excellent,' says Netflix CEO
In case you missed it last night in the All Things D event -- and frankly, given the length and general jejune of it, we wouldn't blame you -- Reed Hastings of Netflix took the stage and sat down with Peter Kafka. Here's the takeaway: when Kafka asked him the chance of "getting on Nintendo," Hastings replied, "our chances are excellent." It's not much, but after at least a year of hints and teasers, it's by far the best confirmation we've got. Of course, he didn't say which system, but let's be honest... the only logical choice is DS, right?
Live from All Things D at CES 2010
We're live at the All Things D event at CES 2010. We're slated to see conversations with Jon Rubinstein, Reed Hastings, and Andy Rubin, so stay tuned -- we start at 3:30PM PT!
Netflix CEO dreams of iPhone, TV, and game console ubiquity
When a CEO is asked to dream we shouldn't be surprised when he dreams big. In an Reuters interview with Netflix CEO, Reed Hastings, we learn that Netflix is working in parallel to bring its services to "all the game consoles, all the Blu-ray players, all the Internet TVs." Naturally, he added that the Xbox deal is exclusive for the time being. The company is currently focused on the big screen but "will get to mobile eventually, including the iPhone." And while the streaming business is "booming," he says the DVD business is still growing as well, likely peaking in "5 years or so" with people still doing DVD-by-mail over the next 20 years. Reed then adjusted his monocle and disappeared in a flash of cigar and brick-and-mortar ash.[Via All Things Digital]
Netflix CEO predicts significant declines in packaged media rentals by 2018
Some think that discs are already dead, but that's because they're ignoring all the success Netflix is still having. Of course any company with a name like Netflix is obviously forward thinking -- the name isn't Discflix after all -- and on that note Reed Hastings, the CEO, told the WSJ that he expects to see significant declines in packaged media rentals in the next "four to nine years." We think that estimate is as good as any, but can't wait to see how the home media landscape changes between now and then. This is of course why Netflix is actively building it's streaming service which evidently is currently only used by 20 percent of Netflix customers.
Netflix earnings call roundup: Testing Saturday shipments, 700k Blu-ray subscribers and even more streaming
All week, we've seen stats, figures and speculation based on Netflix's earnings call leaking out, and here's a few more interesting notes gathered from around the Internet for those not glued to their speakerphone Monday. Checking in to the party was always talkative analyst Michael Pachter, suggesting that the Xbox Live / Netflix combo could bring more than 1 million gamers to Netflix over the next year, with the service becoming a "gold mine" for the video rental company. At the same time, while CEO Reed Hastings touted "millions" served by Watch Instantly streams, the number of Blu-ray subs rose to 700,000, up from 500k at the beginning of December. Whether you count that as a victory for digital distribution or old school discs, those still checking their mailbox will be happy to know the company is testing Saturday shipping in certain regions...as long as the USPS keeps mailing six days a week.Read - Netflix testing weekend shippingRead - Netflix: Blu-ray adoption slow than Internet movie streaming adoptionRead - Xbox Live is proverbial gold mine for Netflix says Pachter
