Netflix + Consoles = Profits

Michael Pachter, Wedbush analyst, has predicted that Netflix subscribers will jump by 3 million this year alone thanks to console owners.

According to Pachter, he believes that Xbox 360 users added around 800,000 new subscribers to Netflix last year and he expected Playstation and Wii users to repeat those numbers.  When those numbers were higher then everyone predicted there was a need to reevaluate.

“Subscriber growth exceeded our expectations in Q1,” he said. “And the company increased full year subscriber guidance by 1 million, implying that contribution from the consoles may be running closer to 3 million this year.”

Netflix has let it be known that subscribers that actively streamed content grew to 55% an increase from 48% in 2009.

Pachter expressed his doubts that the Wii will be as successful in terms of Netflix users due to lack of HD output and number of users who are actually connected to the internet.

“Further, the Wii audience has demonstrated little commitment to buying videogames (attach rates are at historical console lows), leading us to suspect that many Wiis are relegated to the playroom or (heaven forbid) the closet,”

“It is possible that initial expectations for new customers from the Wii installed base may be overly optimistic, and we will closely monitor Netflix’s subscriber growth over the next few quarters to see if the decline in growth is as significant as we have forecast.”

Netflix posted Q1 financials  on Wednesday showing profits of $187 million.

(Via gi)

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  • We had Netflix before we got the Xbox, but didn’t use the streaming function very much. Mainly I used it when I was playing computer games and had a laptop available, which wasn’t often. Then we got the Xbox and we now watch streaming almost exclusively. We only get a few DVDs a month now. Its rather nice to be able to find something to watch so easily and I’m guessing thats what a lot of people are thinking. I have friends who got Netflix after they got a Xbox, even though they were resistant to getting Netflix beforehand, but now they love it.

    This was probably one of Netflix’s best moves.

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