Netflix Tops 20 Million Subscribers26 Jan, 2011 By: Erik Gruenwedel
Netflix Jan. 26 said it added 7.7 million subscribers in 2010, ending the year with 20.1 million members and more than doubling (63%) subscriber growth from 2009.
The Los Gatos, Calif.-based online disc rental pioneer reported fourth quarter (ended Dec. 31, 2010) net income of $47 million, up 51% from net income of $31 million during the previous-year period.
Netflix added more than 3 million subscribers in the quarter and posted revenue of nearly $600 million ($596 million), an increase of 34% from revenue of $445 million last year.
By comparison, Blockbuster generated $471 million in disc rental revenue in its last quarter before filing for bankruptcy. It generated $294.1 million in rental revenue in October and November. Redbox parent Coinstar earlier this month revised downward fourth quarter disc rental revenue to $391 million.
Notably, Netflix said 1/3 of new subscribers are opting for streaming-only at $7.99 per month, while the majority lean toward the $9.99 monthly one DVD plan.
In addition, Netflix is increasing subscribers and revenue while spending less in the quarter on marketing ($62.8 million) than in any other period of the fiscal year. Indeed, marketing costs in the quarter were almost 12% less than during the same period in 2009.
Netflix said the ongoing surge in subscriber growth was fueled by consumer interest in streaming, adding that membership growth would help it pay for more relevant content.
“More subscriber growth enables us to spend more on streaming content, making the Netflix service even better in 2011,” the company said in a statement.
Netflix said that as streaming continues to become its primary focus, current 28-day embargoes of new release movies by Warner Home Video, 20th Century Fox Home Entertainment and Universal Studios Home Entertainment will “matter less to us.”