Netflix sees streaming video service take off

Netflix is seeing the benefits of its industry-leading over-the-top streaming video delivery service. For Q4 2008, Netflix had revenues of $359.6 million, up 19 percent year-over-year, and it added more than 700,000 subscribers. Netflix currently has 9.4 million subscribers, but it said it expects that number to climb to 10.6 million during Q1 of 2009. 

"It's very clear that streaming is energizing our growth," Netflix Chief Executive Reed Hastings said on the company's earnings call Monday.

While the company did not break out the number of its subscribers using the streaming service, as subscribers get the service for no additional fee, Netflix did report a 45 percent increase in net income for the Q4 2008 compared to Q4 2007. Its net income increased from $15.7 million to $22.7 million.

DVD rentals still make up the bulk of Netflix's revenue, but the company is clear about the direction the delivery of entertainment content is taking. Hastings plans to build on the success of the streaming offering by expanding the amount of content Netflix has licensed.

"We plan to spend as much money as we can with the studios, licensing as much content as we can -- and we are already one of the studios' largest Internet revenue sources," Hastings said. "Our spending is limited only by what content is available at reasonable costs."

Netflix has announced a slew of partnerships in the past three months aimed at providing the most comprehensive over-the-top video delivery service to customers. Its "Watch Instantly" service is now available on Xbox 360s, some LG and Samsung Blu-Ray players, and Roku set-top boxes. It will be available on various broadband-connected HDTVs in the coming months.

Netflix has the jump on the streaming video market, as it has leveraged its existing partnerships and customer base to have a much more compelling offering than either Vudu or Blockbuster. 

For more:
- see the Los Angeles Times article here 

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