Hasta La Gadget!

Netflix has reported its financial results for the first quarter of 2013, and in that period it’s added over 3 million customers worldwide. Domestically it added 2.03 million customers alone, pushing its total number over 30 million (including trial users) in the US. That means it’s passed HBO in paying subscribers for the first time ever, while notching $2.69 million in net profits on $1.02 billion in revenue for the quarter. Internationally there were over a million new sign-ups and it’s planning to launch in a new European market during the second half of this year, which we should hear more about on its Q2 earnings call in July.

One change all users will notice is to its package of streaming plans, as CEO Reed Hastings mentioned an $11.99 per month option is incoming that will allow subscribers to stream as many as four videos simultaneously, up from the current official limit of two. There’s some question over whether Netflix will begin to crack down harder on account sharing, but Hastings claims he expects less than one percent of users to opt for the new plan. The company is also continuing to test the personalized profiles we got a peek at during CES, and expects to roll them out “in the coming months.” Another major note is that as it expands its suite of original content, it’s shifting focus away from some of existing “bulk, nonexclusive” licensing deals and will let a major one from Viacom expire in May. Specifically referenced is content from Nickelodeon, MTV and BET, although it’s negotiating for access to particular shows. In the future, its preferred option will be exclusive deals with the studios that produce the shows, like the one it announced earlier this year with Warner. Check after the break for a few more details, including updates on the progress of some of its original series.

Filed under: Home Entertainment, HD

Comments

Source: Netflix Q1 Investors letter (PDF)

Netflix recently let it drop that its users clocked in more than one billion hours of content-viewing in the month of June alone, although the big question for CEO Reed Hastings is how that relates to the company’s subscriber base. The results are in from its Q2 2012 earnings report, and it’s claiming 27.56 million streaming subscribers worldwide, up from 26 million last quarter. In the US alone that includes 23.94 million customers, after it reported 23.4 million in Q1, while DVD customers dropped by 850k to 9.24 million. While the number of new subscribers wasn’t as high as some had hoped, the good news is the company is finally back in the black, with $889 million in revenue providing $6 million in net income. On the flip side, a plan to launch service in an “additional attractive European market” in Q4 is expected to result in temporary losses, but we’ll find out more about those plans later in Q3.

One other issue that has been resolved is the search for a new Chief Marketing Officer resulting in the hiring of Kelly Bennett, formerly a marketing executive with Warner Bros. This morning Verizon and Redbox began to carefully pull back the cover on their competing offering, and Amazon has also been making significant waves in the space. However in response, Netflix says Amazon and Hulu Plus have yet to gain meaningful traction in relation to its viewing hours, and it expects Redbox Instant to face a “big challenge” to break into the existing top 3. Its current content deal with Epix will lose online exclusivity “shortly” although it will still offer those titles, we’ll see if any of the competition joins in. Their biggest competition however, is expected to come from efforts like Comcast’s new X1 and Sky’s Now TV, while for HBO, the possibility of cooperation is actually raised (again). We’ll see if that happens or if there are any more juicy details revealed on the investor call in a few minutes.

Filed under: Home Entertainment, Internet

Netflix Q2 2012 earnings: 530,000 more US subscribers and a return to profitability originally appeared on Engadget on Tue, 24 Jul 2012 16:07:00 EDT. Please see our terms for use of feeds.

Permalink   |  Netflix Q2 Letter to shareholders (PDF)  | Email this | Comments