Netflix Reaping the Rewards of Streaming Video

2010 // May

Last quarter results show DVD distributor Netflix received a ringing endorsement of its decision to provide movies and TV shows via streaming content.

Share-price earnings, revenue, and subscriber numbers all exceeded projected targets, as company figures showed a strong preference for streaming video versus DVD mail delivery - which was Netflix's founding concept. 

According to ZDNet figures, "55 percent of its nearly 14 million subscribers are now watching...via the Internet." Additionally, the number of Netflix subscribers has steadily grown from this time last year, announced at 13,967,000 on March 31 - a 31 percent increase.

Netflix also reported first quarter earnings of $32.3 million, a jump of 25 percent from last year, exceeding Wall Street targets by more than 5 cents a share.   

The shift in subscriber viewing preferences has also significantly cut company costs at a time of growing interest. The average cost to acquire a customer -- $21.54 per gross subscriber -- was significantly down from $25.79 a year ago, according to ZDNet.