PSound
04-14-09, 10:42 PM
He said Netflix would continue to invest a significant percentage of its earnings into improved content for the Watch Instantly streaming service totaling about $100 million this year, compared to $75 million in 2008.
The analyst said the 25% surge in streaming investment would be partially offset by reduced subscriber demand for DVD rentals and related postage and fulfillment expenses. He said Netflix’s average-revenue-per-user (ARPU) would begin to rise gradually through the company’s recent increase in Blu-ray pricing, resulting in improved operating leverage.
Pachter said Netflix’s recent content deal with MTV/Comedy Central for “South Park” episodes and related agreements with Starz substantially increase the quality of its streaming fare.
Research analyst Edward Woo concurred that Netflix is using the Blu-ray price increase to gauge subscriber reaction to a possible future charge for streaming.
Wedbush believes Netflix can reach 10% household penetration via streaming partnerships with Microsoft, LG Electronics, Samsung and others. He said streaming accounted for 610,000 new subscribers during the first six weeks of the year.
“We continue to expect streaming to drive new customers to Netflix and limit churn of existing customers, ultimately allowing the company to manage its operating costs,” Pachter wrote. “Netflix controls its own destiny.”
http://www.homemediamagazine.com/netflix/wedbush-netflix-spending-100m-streaming-2009-15352
The analyst said the 25% surge in streaming investment would be partially offset by reduced subscriber demand for DVD rentals and related postage and fulfillment expenses. He said Netflix’s average-revenue-per-user (ARPU) would begin to rise gradually through the company’s recent increase in Blu-ray pricing, resulting in improved operating leverage.
Pachter said Netflix’s recent content deal with MTV/Comedy Central for “South Park” episodes and related agreements with Starz substantially increase the quality of its streaming fare.
Research analyst Edward Woo concurred that Netflix is using the Blu-ray price increase to gauge subscriber reaction to a possible future charge for streaming.
Wedbush believes Netflix can reach 10% household penetration via streaming partnerships with Microsoft, LG Electronics, Samsung and others. He said streaming accounted for 610,000 new subscribers during the first six weeks of the year.
“We continue to expect streaming to drive new customers to Netflix and limit churn of existing customers, ultimately allowing the company to manage its operating costs,” Pachter wrote. “Netflix controls its own destiny.”
http://www.homemediamagazine.com/netflix/wedbush-netflix-spending-100m-streaming-2009-15352