Thursday, July 16, 2015

Netflix Subs Greater Than Comcast

Last night, Netflix released its financial numbers and they were quite impressive.  With over 65 million subscribers, both in the US and abroad, Netflix is the undisputed leader in video distribution.  In fact, Comcast, the largest cable subscriber in the US has about 22.5 million cable subscribers, a number slowly dropping as a result of cord cutting.  Comcast has about the same number, 22.5 million broadband subscribers.  So even combined, Comcast has only two-thirds the customers of Netflix. Another fact, Netflix has about 42 million here in the US, almost double the number of Comcast cable subs. 

As to growth, many believe that Netflix will exceed 200 million subscribers globally in the next 7 -10 years.  The beauty of their business model is that it only derives its income from subscriber fees, it has yet to embrace any ad model that could significantly add to its bottom line.  And while it may have to pay some transmission fees, it does not have to pay franchise fees, which are required by cable companies.  Netflix's streaming business model has also priced itself under $10 a month, unlike a cable subscription that can be far more expensive.  Netflix could easily raise their prices only a dollar and gain an incremental $65 million dollars monthly with very little backlash.  The future for Netflix seems very rosy.

And streaming is still considered to be cutting edge.  It is eerily reminiscent of Internet's move from dial up to broadband.  As consumers continue to embrace streaming media to their devices, the allure and strength of Netflix content offerings will continue to attract more of the population.