Netflix announced that they have returned to profitability in Q2, expect to remain profitable in Q3, but will show a loss in Q4 as they enter another international market.
The Q2 2012 numbers:
Domestic streaming subscribers (paid): 22.69 million
International streaming subscribers (paid): 3.02 million
DVD customers (paid): 9.96 million
Global revenue: $889 million
Global net income: $6 million
On the streaming war in Europe:
6 months ago, we launched Netflix in the UK and Ireland, and today we are one million members strong. We believe we have pulled ahead of LOVEFiLM in every important streaming-related metric. Going forward, competing effectively with Sky is our core and substantial challenge.
On recovering from the price increase last year:
Our reputation with our members and their likelihood to recommend the Netflix service is steadily improving. Our original thesis was three years to full brand recovery (subsequent to the DVD-related price increases last summer), and that seems correct so far.
Regarding the domestic competition:
We have yet to see HuluPlus or Amazon Prime Instant Video gain meaningful traction relative to our viewing hours, but as we continue to build a domestic profit stream they are likely to increase their efforts to gain viewing share. Redbox Instant by Verizon, once they launch, will face a big challenge to break into the top 3 of subscription streaming services.