Oct 01, 2002
Netflix Announces Third Quarter 2002 Ending Subscribers of 742,000, Up 122% Over the Prior Year
LOS GATOS, Calif., Oct. 1 /PRNewswire-FirstCall/ --
Netflix, Inc. (Nasdaq: NFLX) ended the third quarter of 2002 with
approximately 742,000 total subscribers, approximately 12,000 subscribers
above the high end of the Company's guidance of 730,000.Subscribers grew 122
percent year-over-year from 334,000 total subscribers at the end of the third
quarter of 2001 and 11 percent sequentially from 670,000 total subscribers at
the end of the second quarter of 2002.
New Trial Subscribers
Netflix acquired 277,000 new trial subscribers in the third quarter, a 159
percent year-over-year increase from the 107,000 new trial subscribers in the
third quarter of 2001 and a sequential increase of 17 percent over the
236,000 new trial subscribers in the second quarter of 2002.
Paid Subscribers
Of the 742,000 total subscribers at quarter end, 95 percent or 708,000
were paying subscribers.The other 5 percent, or 34,000 subscribers, were new
trial subscribers. Paying subscribers represented 95 percent of total
subscribers in the third quarter of 2001 and the second quarter of 2002.
Household Penetration
Household penetration in the San Francisco Bay Area rose to 3.5 percent of
households at the end of the third quarter of 2002, up from 3.2 percent of at
the end of the second quarter of 2002.Household penetration in the rest of
the country reached 0.63 percent at the end of the third quarter of 2002, up
from 0.57 percent at the end of the second quarter of 2002.Market research
firm NPDTechworld estimates that 36 percent of all U.S. households have a
standalone DVD player as of the end of August 2002.
Subscriber Churn
Average monthly churn for the third quarter of 2002 was 7.2 percent.This
compares to average monthly churn of 6.7 percent in the second quarter of
2002, 7.2 percent in the first quarter of 2002, and 6.5% in the third quarter
of 2001.Churn includes free trial subscribers as well as paying subscribers
who elect not to renew their monthly Netflix subscription service.The
increase in churn occurred broadly across the subscriber base and is primarily
attributable to the Company making it easier for subscribers to cancel their
Netflix service online instead of having to call an 800 number during regular
business hours to cancel. "To grow a large business, you have to do right by
subscribers and that includes allowing subscribers to cancel, if they so
desire, with a minimum of hassle," said Netflix CEO Reed Hastings.
Third Quarter Earnings Release
Netflix will release its third quarter 2002 financial results on Thursday,
October 17, 2002 after the market close.A webcast of the quarterly
conference call will begin at 1:10 PM PDT and can be accessed via the web at
www.netflix.com or at www.prnewswire.com.
About Netflix
Launched in 1998, Netflix is the world's largest online DVD rental
service, providing more than 742,000 subscribers with access to a
comprehensive library of over 12,000 DVD titles.For $19.95 a month, Netflix
subscribers can rent as many DVDs as they want, with three movies out at a
time, and keep them for as long as they like.There are no due dates and no
late fees.DVDs are delivered directly to the subscriber's address by first-
class mail from 11 distribution centers throughout the United States. The
company also provides background information on DVD releases, including
reviews, member reviews and ratings and personalized movie recommendations.
For more information on the company, visit www.netflix.com .
Categories:
Press Releases