Follow him on Twitter at /troywolv.Je ne m'y attendais assurément pas mais Sydney Pollack le branleur du vide et de l'ennui cinématochiatique a tiré quelque chose du bouquin (que je n'ai pas lu) de John Grisham. But, she added, “I’m very confident that Netflix has positioned themselves well and will do so in future.”Ĭontact Troy Wolverton at 40. “There’s going be to increased competition (for Netflix) moving forward,” said Curtis of IDC.
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Subscribers can tune into the videos via a PC or one of a growing number of devices, such as the Roku Digital Media Player or Microsoft’s Xbox 360 game console.Īnd Netflix has other advantages that could boost its digital efforts: a strong brand, loyal customers, reams of data on subscribers’ movie preferences and the most prominent subscription on-demand service, analysts note.
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Netflix has responded by launching its own digital service, which has some 12,000 movies and TV shows that it streams over the Internet. Among those offering such services are powerhouse companies, such as the giant cable and satellite TV providers, Apple, Amazon and Hollywood studio-backed Hulu. At the same time, consumers have been buying fewer DVDs and increasingly been getting video from on-demand and digital distribution services. Redbox, a competitor that rents DVDs via kiosks at supermarkets and other stores, is rapidly attracting customers. Meanwhile, the company could soon face new challenges. And its average revenue per member has dropped - in part due to a price cut - from $16.34 at the end of 2006 to $13.78 at the end of its most recent quarter. The company’s revenue growth slowed last year from 21 percent in 2007. To be sure, Netflix hasn’t been immune to the recession. The company’s success “is a strong testament to the management there,” he said. In contrast, consumers can expect to pay $10 to $20 to buy a single DVD, or up to $5 to rent a DVD from Blockbuster or a video from a number of digital or on-demand services.Īlso in Netflix’s favor is that CEO Reed Hastings and his executive team have consistently made the right decisions in steering the business, said Ken Broad, a portfolio manager at Delaware Investments, which has owned shares of Netflix for four years. For $9 a month, members can rent as many DVDs as they want - one at a time - and keep them out for as long as they want or watch an unlimited number of videos streamed over the Internet. The movie industry did well in the Great Depression, for example, and has tended to fare well in the economic downturns that have followed.Īnd Netflix’s subscription prices offer consumers a bargain. But even in a downturn, consumers find ways to continue to pay for entertainment, particularly video entertainment. The company will post those results next week.Īnalysts and company representatives say Netflix has a number of things going in its favor.Ĭonsumers tend to cut spending in economic downturns and subscriptions are often one of the first things they cut back on. Netflix continued its healthy growth in the first quarter of this year and has projected continued strong results in its recently ended second quarter. Blockbuster shuttered 267 stores worldwide. That video rental chain posted a $374 million loss last year as sales fell 5 percent to $5.3 billion. Those results stand in stark contrast not only to the broader retail sector, but also to arch rival Blockbuster. And its subscriber base grew to 9.4 million. Its earnings jumped 24 percent to $83 million. Last year, as overall retail sales declined, Netflix’s revenue grew a robust 13 percent to $1.4 billion. And Blockbuster, which has long dominated the brick-and-mortar rental business, has been unable to catch up to Netflix online. Though has long been rumored to be interested in the DVD rental market, it’s stayed out. Four years ago, Wal-Mart shut down its nascent online video rental service, directing customers to Netflix. The company has already fended off some powerful rivals and discouraged some potential ones. Consumers subscribe to one of several plans typically ranging from $5 to about $17 a month, depending on the number of DVDs they can have out at one time over the course of a month. Netflix built its franchise around renting DVDs through the mail. That was just the latest bump in Netflix stock, which is up 57 percent over the past year, despite the stock market crash last fall. It’s been repeatedly cited as a takeover target, most recently this week when its stock surged on rumors that had come courting. The company’s recent success has not gone unnoticed. 2009: Netflix defies recession – The Mercury News Close Menu