Source: http://www.engadget.com/2011/07/25/netflix-rises-to-25-million-subscribers-in-q2-thinks-dvd-busine/
If you were still wondering why Netflix chose right now to split apart its unlimited DVD and streaming movie plans you need look no further than the just released Q2 financial report. According to the numbers, 75 percent of new subscribers were picking streaming only plans, while the total number of people on the hybrid DVD / streaming plan had actually decreased slightly, even as it breached 25 million subscribers worldwide. Of course, it did notice the intense backlash to the new rates, but predicts that after the hit of cancellations by the end of the third quarter it will still have 22 million people subscribed to streaming, 15 million total subscribed to DVDs, and about 12 million customers with both. Waiting on that Facebook integration? Don’t hold your breath, while the new features are due to launch soon in Canada and Latin America, it claims ambiguous wording in the Video Privacy Protection Act is holding things back domestically.
Other details include confirmation it will not look into purchasing Hulu Plus, and that it’s still negotiating a renewal of its deal with Starz. While the DVD business may have peaked, it’s not quite dead yet and Netflix indicated it will start marketing that feature again in the fourth quarter. Click the source link to paw through the PDF yourself, we’ll be keeping an ear tuned to the investor call later to find out exactly what the company’s executives are thinking.
Netflix rises to 25 million subscribers in Q2, thinks DVD business has already peaked originally appeared on Engadget on Mon, 25 Jul 2011 16:19:00 EDT. Please see our terms for use of feeds.
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In days of old, advertisers had to buy TV airtime, magazine placements, or radio spots to send their ads out to reach customers. Usually one of the largest chunks of cost is the media placement, followed by “creative” development and content creation.
What if there was a way to cut out most or all of the media cost? And what if we could also substantially reduce the cost of “creative development” and “content creation?” Look at the JetBlue example below. On Twitter, JetBlue has nearly 600,000 followers. Each of these followers has basically “opted in” to receive their updates, often multiple times a day (“costless media”). There is no “media cost” for getting these messages out. Compare this to what it would cost to air a TV ad that reaches 600,000 viewers (assuming all the viewers wanted to receive the ad, and were sitting there in front of the TV watching the ad when it was aired).
Also, the cost of content is nearly zero too. JetBlue has their customer service people (and fans) help create content by tweeting. These tweets range from customer service (“twitter customer service”) , to service notices (e.g. dense fog in NYC area airports causing delays, etc.), to tips from frequent travelers. This type of content is more “real,” valuable, and trusted than an advertisement. And there is no cost of “creative development” because the content does not need to be dressed up into a glossy ad for TV or print — it’s just 140 characters of text at a time. It’s more effective AND lower cost?! Imagine that!
Finally, notice in the “bio” area on the upper right of the screen shot that it reports who is currently on duty — “Morgan and Lindsey” — this gives the normally faceless customer service system a name and a face and perhaps even a personality. JetBlue’s twitter is a great example of social marketing done awesome!
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