“Our huge subscriber growth, fueled by the excitement of watching instantly, impressed even us,” said CEO Reed Hastings and CFO David Wells (News – Alert) of the streaming video and online DVD rental company Netflix .
The company ended out 2010 by surpassing 20 million subscribers (it signed up net 3 million new customers during the final quarter), and achieving a share price of $0.87. During the fourth quarter, Netflix brought in $596 million in revenue, and had net income of $47 million.
One important key to Netflix’s success is that the company captured the shifting of consumer behaviour affected by the change of social trends. Technological advances have greatly influenced the society in the past few decades: huge commercial success of Apple, Facebook and Twitter, etc. We have entered the generation of internet. In addition, we live in the time-poor society. People are busier and more stressed now. They are less willing to drive all the way to a movie theatre, lining up for tickets, and wasting time for waiting the movie. Netflix sensed this change and viewed digital streaming as a viable substitute for its movie-by-mail business model, it launched “Watch Instantly,” which let people with high-speed internet connections view movies on demand.
Even though, there are movie studios complained that Netflix is harming the industry, In 2011, some of them will notice the necessity of inking deals with the company. Content providers will look to pay premiums for prominent placement. Other advertisers will seek ways to get in front of Netflix’s audience. Here comes another successful year for Netflix.
links:
http://adage.com/digitalalist10/article?article_id=142199
http://iptv.tmcnet.com/topics/iptv/articles/138664-netflix-celebrates-successful-4q-2010.htm
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