Netflix to Add "New Consumer Electronics Device" & More From Earnings Call

During the earnings call Netflix CEO Reed Hastings disclosed some very interesting information:

• Netflix will add a new "consumer electronics device" in Q4 and they've increased projections because of the device. Wii? PS3? iPhone?
• Netflix will spend $40 million on new machines to open, inspect and clean DVDs. A Netflix spokesperson said that "workers will stay" when asked if the machines would eliminate jobs.
• Hastings says that Netflix will be shipping DVDs until 2030, hence the $40 million investment in automation.
• A DVD sales window before the rental window would be good for Netflix, according to Hastings, since costs would be lower for content and Netflix is less focused on new releases. Hasting said that a later rental window would help with new release availability, and with the money they save they could spend more on streaming titles.
• The number of customers using streaming (at least one movie or show per month) has doubled to more than 40% in the past year.
• Hastings believes that the $600 million or more they spend on postage will convert to streaming, making Netflix one of the biggest customers of the studios behind Wal-Mart and Amazon.
• International Expansion: Netflix will offer a streaming-only plan in an unannounced international market in the second half of 2010. 
• Less than 10% of subscribers rent Blu-ray titles from Netflix.

Comments

[Hector Ramos]

Here in Puerto Rico we can get discs by mail but they disallow streaming. If they will offer streaming internationally where does that leave us? Puerto Rico is a territory of the US, not international.

[twitter.com/MCWHAMMER]

I co-run Streaming Soon. Over the past few days, we've been getting hits on SiteMeter from the domain of 989studios.com (And upon clicking the details, it displays the ISP # and name of Sony North America). Video gamers will know this name very well. 989 is now a PlayStation absolved brand. I didn't think much of it the first time I saw it pop up, but after multiple hits, I believe this could be a sign of a PS3 future for streaming, and an inadvertent leak.

The strangest thing is that 989Studios redirects to the US Sony's page directly, which I don't fully understand...

I don't know, take it with a grain of salt, because we do get hits from Microsoft corporation, and even a recent hit from The Senate (Seriously.). So, yeah, it gets pretty weird around our parts.

[twitter.com/MCWHAMMER]

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[max]

That is interesting. I remember 989 made a number of hockey games and basketball games for playstation.

[Cvnk]

DVD's in 2030? God, I hope not.

[Wyatt]

There is only 10% of members renting Blu-Ray because the multiple rate increases.

[Crow550]

People would rather stream. However they need to get rid of the Blu-Ray added cost and spend some $$$ on getting more Blu-Rays in stock.

Glad to hear next year, well see more streaming titles.

As well more devices. Here's hoping the Wii & PS3. :-D

[Del]

PS3 streaming would be great, the Wii resolution would not hack it though.

[Gran]

However they need to get rid of the Blu-Ray added cost and spend some $$$ on getting more Blu-Rays in stock.

How does that make sense?

[Jesus Chris]

However they need to get rid of the Blu-Ray added cost and spend some $$$ on getting more Blu-Rays in stock.

How does that make sense?

It works for the government

[Scott]

Streaming outpaces blu-ray because convenience trumps quality. Same reason we listen to MP3s.

[Isaac Church]

"Streaming outpaces blu-ray because convenience trumps quality. Same reason we listen to MP3s."

I would agree with that except it's not one thing or the other. Even if you subscribe to Blu-ray rentals, you still get streaming without extra cost. I do both, and they don't compete with one another most of the time because the streaming content is old and most of it is SD.

If the roles were reversed, and you had to pay extra for streaming, while blu-ray access was just part of the package, I think we'd see a decrease in streaming usage.

[frank22]

Yeah, if the supermarket would drop the cost of steak to the same as price as hamburg, I would buy more steak. Stupid supermarket.

[bob]

Wii or bust. I'm not shelling out $300 for a PS3 that I'd never use as anything more than an overpriced BD player.

[Gran]

Yeah, if the supermarket would drop the cost of steak to the same as price as hamburg, I would buy more steak. Stupid supermarket.

Yeah, if hamburger were as good a cut of meat as steak, I would buy more hamburger. Stupid cow.

[Action Bastard]

"Wii or bust. I'm not shelling out $300 for a PS3 that I'd never use as anything more than an overpriced BD player."

Hahaha. Haven't played Uncharted 2 or Demon's Souls huh? Still stuck with Metroid? The eighties were fun. Anywho...Netflix on the PS3 is inevitable.

[John Tierney]

Why does everybody assume that streaming will always be free, i.e. included in the base price. At some point NF will make streaming an addon and have it as an additional monthly charge. (Will they reduce the base price at the same time?) Just like BD. It's coming. The only question is when. My bet is 2010.

Not sure why NF think that they will be able to negotiate a lower price if they have a latter release date than they do now. You can bet the studios are not thinking lower price.

[frank22]

"Why does everybody assume that streaming will always be free, i.e. included in the base price. At some point NF will make streaming an addon and have it as an additional monthly charge. (Will they reduce the base price at the same time?) Just like BD. It's coming. The only question is when. My bet is 2010"

Because streaming is cheaper than mailing out a DVD. They save money by offering streaming on average because people rent less DVD's if they also stream.

[frank22]

"Not sure why NF think that they will be able to negotiate a lower price if they have a latter release date than they do now. You can bet the studios are not thinking lower price."

The studios can't legally stop Redbox and Netflix from renting DVD's if they are for sale, but the studios think that if they have an early window to sell only, they will sell more. The studios and Netflix appear to be reaching an agreement where Netflix will get a cost reduction for not renting in the first 30 days. I don't think it will increase sales, but who knows? I don't care waiting a little, most of my rentals are not new releases. I can wait, and it won't make me buy DVD's either. Oh well.

[Gran]

Yesss! It's the PS3!