Netflix Hits 33 Global Million Streaming Customers & $945 Million in Revenue in Q4

Netflix ended Q4 with more than 33 million global subscribers (27 million domestic & 6 million international), and had a modest profit of $7.9 million on $945 million in revenue. 

Netflix Q4 results highlights include:

• Netflix added 2 million domestic and 1.8 million international streaming customers.
• Netflix lost only $105 million on the International business, less than expected because of higher than expected growth of international subscriptions and revenue.
• Netflix lost only 380,000 DVD subscribers in Q4, less than anticipated.
• Domestic streaming's contribution to profit is expected to surpass DVD in Q1.
• The letter notes that they have had "constructive conversations" with Carl Icahn, who owns 10% of Netflix.

Q1 2013 Forecast:

• 28.5 to 29.2 domestic streaming and 6.6 to 7.3 million international streaming customers.
• Domestic streaming profit of $122 - $130 million, and international streaming loss of $94 - $80 million.
• Net income of $0 to $14 million.

From the Q&A call at 3pm PST:

• Price Increase? Netflix CEO Reed Hastings: "We're happy at $7.99 and won't comment on the future."
• Streaming commitments: $5.6 billion, $2.5 billion on the books, $3.1 not.
• Regarding "Qwikster" fiasco: Hastings said that they are still on "probation."
• Profiles: Still testing new profiles feature, will launch sometime in 2013.
• House of Cards impact on subscriber additions: "Small benefit for Q1."

Netflix compared the top 200 shows on Netflix to content available on Amazon Prime and Hulu, and shared the results:

"More narrowly, Amazon Prime, Redbox Instant, and Hulu also offer low-cost streaming offerings, and they have some of the same content that Netflix has, as well as some unique content.   The more unique content they have (for example, “Battleground” and “Community” on Hulu, or “Falling Skies” and “The Closer” on Amazon Prime), the more they are a different service than ours.  To the degree they have some of the same content as Netflix, they are potentially a substitute for Netflix.  To examine this, we looked at the top 200 titles on Netflix:  our 100 most popular movies and our 100 most popular TV shows in Q4.  Of these 200, 113 are not on Amazon Prime, Hulu Plus or Redbox Instant. Of the 87 that are available on at least one of these services, Hulu Plus offers 27 of the 200; Amazon Prime 73 of the 200; and Redbox Instant 12 of the 200, with significant overlap in TV between Hulu Plus and Amazon Prime, and in movies between Amazon Prime and Redbox Instant.  In other words, when it comes to the most popular content with members on Netflix, none of these services are good substitutes to Netflix."

You can read Netflix's letter to shareholders on the Netflix Investor Relations website.

Comments

[Richard Hatcher]

Neat graph. Any chance we could see the same graph from the prospective of HuluPlus and Amazon Prime?

[Moviegeek65]

NFLX is up 35% after hours which is insane considering they only made $7.9 million in profit(international will continue to lose money).

[CordCutter]

He's ALIVE... he's ALIVE!!! Welcome back to the land of the livin'... NOW PICK UP A SHOVEL AND GET DIGGING!

That pie chart makes me hungry. I wonder when Dreamworks stuff should start showing up. I thought I read somewhere that The Croods would be the first title to hit in the pay window, but I thought the deal also included catalog titles. Would've thought we would've seen one or two at the start of the year.

Good to see price increases aren't on the horizon, even though anonymous no-it-all trolls insisted they were because of captions.

[CordCutter]

know-it-all*

Geeze you would think if I were gonna slam someone I would spell check first!

[NF]

Price Increases need to be enacted in my opinion

$9.99 and more content

I don't think that would break the bank with customers, but the contribution from all streaming members would allow for better content

I'd guess the price goes up next year.

They're still licking their wounds from last years PR mess. They don't need a bunch of fat, lazy, cheap, people yelling about how Netflix is ruining their life until they're confident it's settled down.

[Groggie]

"I thought the deal also included catalog titles. Would've thought we would've seen one or two at the start of the year."

I think they have added at least some catalog titles. If you search for dreamworks a number of things come up, and those are just the dreamworks titles with dreamworks in the actual title. There are probably others, but I don't really know the difference between the kids movies put out by Disney, Fox, Universal, and Dreamworks.

[Harry]

I always here "Content this" and "Content that" -- I mean, don't get me wrong, more is better, but over-all am happy with the service.

I have netflix running a couple hours a day -- I have yet to find "Nothing to Watch"

The BBC and UK content alone (aka, shows I have never seen before) gives me plenty to watch. My Que is HUGE.

I am always up for more Content, but I don't view it as a necessity right now.

[rjejr]

Congrats on NF for getting their stock back to almost $150, or about half what it was 18 months ago. But it's triple what it was 6 months ago, so they deserve some credit and I'll go back to capitalization the NF now.

And it's still a way better experience than Hulu Plus or Amazon Prime. Even if they had all the same shows and movies most of Amazon's wouldn't be included with Prime and most of Hulu's would only be free on PC, not on TV with paid Hulu Plus. NF wins.

[Alfred Pennyworth]

even Hulu Plus doesn't allow all shows on TVs, just internet (Simpsons, 30 Rock, Kimmel)

[DLP]

Amazon still offers better picture quality than Netflix...by far.

73" tv owner.

[CordCutter]

I'll take my 47" LED over your 73" CRT any day DLP.

[Peter Davenport]

I joined Hulu Plus and noticed a logo in the corner. I called customer service and asked if their programs have logos on all movies and TV shows? She said yes and it was the fastest cancellation to date for me.

BTW, I'll take my Optima DLP Home Theatre Projector with a 9 foot picture over any systems mentioned here. No flat screen replicates film as I was a projectionist for 20 years and they look horrible, especially the CGI.

However if it has recently been shot digitally I'd give it a pass. The CRT would actually win with older films. Projecting with a video projector makes any format look like it did in the cinemas somehow. Includes TV shows. Give it a try!

Interestingly enough we still have a 61' Toshiba big screen from 1996 still going strong in the back room. We're wagering between the dog and this set.

[Galagatron]

Jeez the drop in DVD subscribers is unsettling, and strangely less than expected. Is it that customers are just cutting back on spending so much on Netflix but want to keep DVD, or do those people actually not care to receive discs by mail?

[Peter Davenport]

They are almost giving the DVDs away at Walmart. They even had a Blu-ray double disc edition of "Sucker Punch" for $1.96 during Black Friday that went for much more than that not too long ago. I'm guessing streaming, added with the cost of DVDs and TV show clearances are helping to kill the subscriber base.

I think technology and the change in the new generation that doesn't have 20th century pop culture baggage means they don't collect as much as the people like us who were amazed at the thought of owning a VCR and actually renting or buying our own shows. Then again there's bit torrents, ugh. Love killing my own reasons.