Netflix Now In Virtual Tie With Comcast as Largest U.S. Video Subscription Service

Netflix just reported its Q1 '11 results, gaining 3.3 million subscribers in the U.S. to end the quarter with 22.8 million U.S. subscribers, in a virtual tie with Comcast as the largest U.S. video subscription service as measured by total subscribers. The 22.8 million total met the top end of its guidance range.

As I previously noted, Netflix ended 2010 with just over 20 million subscribers, but that amount included just over 500K international subscribers (in Canada) which Netflix has now broken out for the first time. In the quarter Netflix also added 290K international subscribers to end the quarter at 800K subscribers. In total, Netflix now has 23.6 million subscribers. On another encouraging note, trial subscribers in Q1 '11 fell to 1.392 million, vs. 1.566 million at the end of 2010, accounting for 6.1% of ending subscribers, down from 8%.

Netflix's 3.3 million domestic subscriber additions are nearly double the 1.699 million it added in Q1 '10. That means that Netflix has added over 12.2 million subscribers in the last 6 quarters since it shifted its emphasis to streaming. However, Netflix is indicating that growth in the rest of 2011 will not be as brisk, providing Q2 U.S. guidance of 24 to 24.8 million subscribers.

Interestingly, in its Q1 report, Netflix is pointing out that it does NOT see itself as a catalyst for cord-cutting, instead positioning itself as supplemental to pay-TV services. It notes that even though online video use has doubled in the past year and Netflix will continue to show huge growth in 2011, it believes "cord-cutting will be minimal to non-existent."

And a few points from the earnings call:

- On its Canadian rollout, Netflix achieved penetration of 8% of homes within 7 months of rollout, whereas it took 6 years in the U.S. to do the same.

- 2 new countries per year starting in 2012 if Canadian progress continues. Also subject to content costs.

- U.S. penetration is now 21% of homes.

- HBO Go isn't a direct competitor because consumers can't subscribe to it directly.

- Android is a big priority and "we're working hard" on it.

- TV shows and movies are consumed in equal volumes on streaming.

Categories: Aggregators

Topics: Comcast, Netflix