Monday, October 4, 2010
The Growth of Netflix
The New York Times reports that Netflix, the movie rental company, is seeing a continued increase in its number of subscribers. The company now has approximately 15 million subscribers, an increase of 12 million over the past 6 years. Compare these figures with those in 2004 when the company still had under 3 million customers. Netflix is increasing the number of subscribers at a yearly rate of 50%.
While Netflix is probably best known for its DVD mail service, the way subscribers obtain their movies is swiftly changing. For example, take a look at this press release about the recent partnership between Netflix and NBC to stream media content. Also, the percentage of subscribers streaming at least 15 minutes of movie or TV show time is growing. For example, by December 31, 2008, 28% of users streamed their entertainment. A year later, that proportion jumped to 48%. And within six months on June 30, 2010, 61% of subscribers streamed at least 15 minutes of a movie or television program.
As more people stream their films and TV programs, the company expects to reduce the $700 million dollars it already spends on postage every year. However, despite the success of the company both in attracting customers and in expanding its delivery methods to include streaming, it still faces competition from other companies like Google, Apple, and Amazon, all of which are developing their own ways to share online movies and TV programs.