Netflix announced this week that the company added 1.1 million subscribers in the fourth quarter of 2009, the best quarterly growth in the company’s history. The company also noted that almost one half of its subscribers have used its streaming option to view movies and TV shows on computers, game consoles, and other internet-connected devices, without the need for mailing a DVD. Netflix sees streaming as its best long term growth market, and CEO Reed Hastings pointed out in a conference call with investors, “… most of our advertising purchasing has moved to be streaming-centric, our default home page is now our instant watching home page, and our PR is increasingly focused on instant watching.”

Despite the emphasis on streaming, Hastings said the company sees more room for growth in the mailed DVD segment of its market:

Our year-over year disc shipments continue to grow steadily, and we think we’ll be mailing discs as part of our service for another 20 years… This year, for the first time in recent memory, we don’t expect a postal rate increase. Despite that, we’ll spend about $600 million on postage this year shipping DVD and Blu-ray movies to our subscribers. Given the rate of video store closures, we think our shipments will continue to grow and that our annual postage will grow to over $800 million in a few years.

In answer to an analyst’s question, Hastings said that the company was satisfied with the performance of its “hybrid” mail/streaming product, and has no plans to introduce a streaming only option.

This entry was posted on Friday, January 29th, 2010 at 2:19 pm and is filed under Netflix, postal. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.