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.