If you wonder why so many entertainment programming and distribution execs are on edge about the rise of Netflix, take a look at how quickly the company’s growth is accelerating, according to new numbers released by the company today:
These are new subscribers, not total subscribers, and the 7.7 million last year was double Netflix’s own expectations. “We think our subscriber growth in any given geography will follow the ‘S’ curve of adoption, and we are excited to still be in the accelerating phase of the ‘S’ curve today,” Netflix’s CEO Reed Hastings and CFO David Wells wrote in their fourth quarter financial report. For those keeping score, Netflix now has more subscribers (20 million) than premium channels Starz and Showtime.
The growth spans just about all devices, including web, gaming platforms and mobile apps. Interestingly, Netflix says Apple TV has surpassed iPad in total Netflix viewing, despite Apple TV’s much smaller base. Roku is growing as well, and then there’s Google TV and connected TVs.
“While Google TV has not yet gone mainstream, the concept of Android and Chrome built into televisions and Blu-ray players is powerful; we’re confident that they will be very successful, and we are investing in our Google TV application,” they explained. “Blu-ray players and TVs with Internet connectivity are the big growth categories for us, as more and more providers are building in Wi-Fi across their product lines.”
Oh, and Netflix made $47 million in the quarter, up 52%.
All this growth is enough to make “aggregators,” as Netflix calls them, a little nervous. Just a few days ago, Netflix said it might try to wrestle away HBO’s movie contract with Warner Bros. “Stepping back, some consternation about Netflix success is natural,” they write. “Like the rise of the Fox broadcast network 20 years ago, a new entrant bids up the price of content, and the incumbent aggregators are not pleased.”
On the TV side, Netflix said it’s strategy remains the same — offering compete previous seasons of shows instead of current episodes. “This is in the best interest of content owners and is consistent with our desire to offer a very low-cost service for consumers,” Hastings and Wells write.
One more interesting tidbit: Netfix says it will publish on Thursday “which ISPs provide the best, most-consistent high speed internet for streaming Netflix.” In other words, if any cable broadband services under-perform, Netflix will let the world know. Update: And they’ve posted it. Here’s the list of ISP’s by performance.
You can read the full letter and financial report here.