Netflix Q1 Results - Loss of another 1 million Disc Subs

Lee Stewart · 04-23-2012, 02:46 PM

Netflix Q1 Results - Loss of another 1 million Disc Subs

Quote:

Netflix has posted its earnings report for Q1 of 2012, and reveals its streaming subscriber count in the US is currently 23.4 million, after reaching 21.67 million back in January. While the company noted a net loss of about $5 million, the letter from CEO Reed Hastings and CFO David Wells claimed it is still on a "rapid return" to profitability after last year's missteps and international expansions. Worldwide it now counts a total of 26 million subscribers to the streaming service, although it lost another million or so subscribers to discs, which currently number 10.09 million. That old disc business is still highly profitable however, adding $146 million to the bottom line.

http://www.engadget.com/2012/04/23/netflix-q1-results/

Kosty · 04-23-2012, 02:49 PM

Quote:

Netflix Posts $5M Loss, Adds Nearly 3M Subs

23 Apr, 2012
By: Erik Gruenwedel

As expected, Netflix April 23 reported a first-quarter (ended March 31) net loss of $5 million while adding 2.95 million streaming subscribers globally, including 1.74 million in the United States.

The loss was a drop from net income of $60 million during the previous-year period. Global revenue reached $870 million, up 21% from revenue of $719 million during the same period last year.

Netflix ended the quarter with 23.4 million domestic streaming subscribers, in addition to more than 3 million international subs.

Netflix’s disc rental serivce lost 1 million subs, lowering its base to more than 10 million members. The waning rental segment nonetheless generated operating profit of $146 million — more than twice the operating income ($67 million) of domestic streaming.

International operations, which include the Caribbean, Mexico, the United Kingdom and Ireland, lost more than $103 million.

The results sent Netflix shares tumbling more than 14% to $87 a share in after-hours trading.

http://www.homemediamagazine.com/net...-3m-subs-27051

Kosty · 04-23-2012, 02:53 PM

Quote:

Peter Kafka

Netflix Posts An In-Line Quarter, But Investors Balk

APRIL 23, 2012 AT 1:26 PM PT

First look at Netflix numbers: A loss of $0.08 a share on revenue of $870 million. Wall Street was expecting revenues of $855 million and a loss of $0.27 a share. The crucial number: 23.41 million domestic streaming subscribers. Netflix had told investors to expect 22.8 million to 23.6 million.

Netflix had previously said it might lose money throughout 2012, but now says things could get better sooner, and predicts that it may turn a profit in Q2.

“The improvement in the outlook is a result of continued member growth (both domestically and internationally), as well as increased efficiency of our content and marketing spending,” CEO Reed Hastings writes in his shareholder letter.

But the market isn’t happy with something – shares are down 12 percent – so we’ll try to figure out why. Perhaps this: “Q2 net adds will be below those of 2010, despite Q2 gross adds following the traditional seasonal pattern,and despite us expecting to match 2010 in annual net additions,” Hastings writes. He adds: “We see nothing new or particularly concerning this quarter to date in our member viewing, acquisition and retention. All are healthy.”
Someone disagrees.

Per usual, Hastings notes competition from Amazon and Hulu, and now Comcast’s Streampix offering. And per usual, he says he can’t see any near-term effect from those services on his business, but promises to “watch them carefully”. And again, he argues that his long-term competition comes from the cable guys, and the promise of their “TV Everywhere” strategy.

Hastings also the company’s expansion into UK and Ireland is promising. But he acknowledges what many Wall Street analysts have already concluded: Latin America will be a challenge. “The odds of us building a large, profitable business in Latin America are very good, but it will take longer than we initially thought.”
Again, here’s the “cheat sheet” from Citi’s Mark Mahaney so you can try to interpret the numbers yourself.

http://allthingsd.com/20120423/netfl...-line-quarter/

HD Goofnut · 04-23-2012, 03:08 PM

More proof that the average consumer doesn't care about quality and would rather watch a TV show. Sad really.

Kosty · 04-23-2012, 03:13 PM

Quote:

Netflix adds 3M subs and beats forecasts, but stock drops

By Daniel Frankel Apr. 23, 2012, 4:50pm No Comments

Netflix continued the expansion of its streaming business in the first quarter, adding nearly 3 million subscribers to a global base that now includes over 26 million customers.

It also beat analysts’ forecasts, increasing revenue by 21 percent to $870 million and losing only 8 cents per share (27 cents per share had been anticipated).

Still, the company’s stock got hammered in after-hours trading, with its share price dropping 14.5 percent to $87.35 as of this posting.

Netflix also saw its DVD business shrink further, shedding just over 1 million subscribers in the quarter. With just over 10 million disc subscribers left, rental of physical media generated 45.6 percent of Netflix’s revenue in the quarter, down from 52.4 percent in the fourth quarter.

Netflix executives have scheduled a 6 p.m. ET conference with investors.

More to come…

http://paidcontent.org/2012/04/23/ne...double-digits/

Kosty · 04-23-2012, 03:15 PM

Looking forward to seeing PSound's analysis of these numbers when they become available.

Looks to be around in line with expectations for streaming subscriber growth and disc by mail loss and revenues.

Lee Stewart · 04-23-2012, 04:11 PM

Quote:

Originally Posted by HD Goofnut

More proof that the average consumer doesn't care about quality and would rather watch a TV show. Sad really.

It's reality - always been like that.

PSound · 04-23-2012, 04:26 PM

1.74 net streaming additions is very strong.

About a 6.5% jump in domestic streaming revenue resulted in nearly a 30% jump in overall contribution profit, which basically proves the point of incremental subscriber increases being so valuable on the fixed cost streaming model.

International is a big surprise (IMO). Global profitability in Q2 and a new market in Q4 were totally unexpected.

The Q2 sub growth guidance combined with the yearly outlook are odd. I will wait to hear more about how they came up with those projections, but it seems weird that growth would slow that much in Q2 (especially after the strong Q1) and then take off again in Q3.

Cygnus · 04-23-2012, 04:59 PM

Hulu+ added 500,000 subs this year. The streaming battle will be interesting to watch.

PSound · 04-23-2012, 05:07 PM

Quote:

Originally Posted by Cygnus

Hulu+ added 500,000 subs this year. The streaming battle will be interesting to watch.

The thing is, I am not sure it is a "battle".

There is little overlap in content. And Hulu+ gives you more recent fare in exchange for commercials.

I have both and the decision for each one was made on its own merits. For me, the same would be true for HBO Go. I would add it and have 3 streaming sources and be happy as heck.

HBO would be happier too as right now I am working my way through Deadwood via disc by mail (and watched The Late Shift the other night). Something tells me those discs have all been depreciated and HBO is seeing zero revenue from those transactions. It is all going to Netflix and the USPS - and I would gladly pay HBO $8 a month instead.

**bruceames** · 04-23-2012, 05:15 PM

So how much was their disc revenue for the quarter?

Lee Stewart · 04-23-2012, 05:22 PM

Quote:

Originally Posted by bruceames

So how much was their disc revenue for the quarter?

Approx $279 million . . . of which $146 million was profit

Cygnus · 04-23-2012, 05:28 PM

Yeah they are more like indirect competitors. I don't see HBO-Go being offered at that price as the cable/sat companies would not be happy. I wonder if ESPN is thinking of having more content available online.

Quote:

Originally Posted by PSound

The thing is, I am not sure it is a "battle".

There is little overlap in content. And Hulu+ gives you more recent fare in exchange for commercials.

I have both and the decision for each one was made on its own merits. For me, the same would be true for HBO Go. I would add it and have 3 streaming sources and be happy as heck.

HBO would be happier too as right now I am working my way through Deadwood via disc by mail (and watched The Late Shift the other night). Something tells me those discs have all been depreciated and HBO is seeing zero revenue from those transactions. It is all going to Netflix and the USPS - and I would gladly pay HBO $8 a month instead.

**bruceames** · 04-23-2012, 05:43 PM

Quote:

Originally Posted by Lee Stewart

Approx $279 million . . . of which $146 million was profit

Seems a tad low for 10 million subs. Less than $10 per month per sub. Is everybody on the 1 disc plan or are there a bunch of free trial subs in there?

mikemorel · 04-23-2012, 05:51 PM

Quote:

Originally Posted by Lee Stewart

Approx $279 million . . . of which $146 million was profit

I get $320 million in disc revenue...

Guidance for next quarter...

http://ir.netflix.com/results.cfm

04-23-2012, 03:08 PM	#4
HD Goofnut Official HDF BD Reviewer Join Date: Dec 2007 Location: Mississippi, U.S.A. Your resident Dune, Star Wars, and war film expert Posts: 9,556	More proof that the average consumer doesn't care about quality and would rather watch a TV show. Sad really. __________________ BenQ MP512ST, Panasonic TC-L55ET5 55" 360Hz LED/3D, Sharp LC-46SB57UN 46" 120 Hz LCD, Sanyo DP46848 46" 60Hz LCD, HP 21.5" 60Hz LCD Onkyo TX-NR709 7.1/Onkyo SKS-HT540 ASUS BD Drive, LG BH200, Sony Optiarc Blu-ray Burner, Sony BDP-590, Vizio VBR220 My Motion Picture Collection Latest BD Review: *Jack Reacher*

04-23-2012, 03:15 PM	#6
Kosty Home Theater Enthusiast Join Date: Aug 2007 Posts: 5,064	Looking forward to seeing PSound's analysis of these numbers when they become available. Looks to be around in line with expectations for streaming subscriber growth and disc by mail loss and revenues. __________________ . "A lot of good arguments are spoiled by some fool who knows what he is talking about." - Miguel de Unamuno "I understand the concept of optimism. But I think with me what you get is a lack of cynicism." - Tom Hanks "I don't think you lead by pessimism and cynicism. I think you lead by optimism and enthusiasm and energy." - Patricia Ireland

04-23-2012, 04:59 PM	#9
Cygnus The Bringer of Balance Join Date: Dec 2004 Posts: 11,350	Hulu+ added 500,000 subs this year. The streaming battle will be interesting to watch. __________________ Panasonic P55 ST30 Kenwood VR-616 Comcast DCT6412 III XBox 360 GamerTag Sec0nd2N0n3

04-23-2012, 05:15 PM	#11
bruceames Super Moderator Join Date: May 2006 Location: Novato, CA Posts: 15,346	So how much was their disc revenue for the quarter? __________________ RIP Kosty.

04-23-2012, 04:26 PM	#8
PSound High Definition is the definition of life. Join Date: Oct 2011 Posts: 1,749	1.74 net streaming additions is very strong. About a 6.5% jump in domestic streaming revenue resulted in nearly a 30% jump in overall contribution profit, which basically proves the point of incremental subscriber increases being so valuable on the fixed cost streaming model. International is a big surprise (IMO). Global profitability in Q2 and a new market in Q4 were totally unexpected. The Q2 sub growth guidance combined with the yearly outlook are odd. I will wait to hear more about how they came up with those projections, but it seems weird that growth would slow that much in Q2 (especially after the strong Q1) and then take off again in Q3.