This company is doomed. Based on the recent interview, the avarage sub stays with the company only 20 months. The CEO admits that technology will destroy dvd rental market in 2007 and he is hoping that netflix could be part of the change. I wonder how the earnings will be with the increased advertisments. I can't wait for the Jan 21 to see the GAAP earings(or maybe loss).
I see a lot of folks posting that the 5% churn means a customer only stays with NFLX for 20months. I think the truth is the majority of that churn comes from free trial subscribers who choose not to stay on at the end of their free trial. The company has been in business for 5+ years and certainly they would not have a growing customer base (SF is close to 6% market penetration) if each paying customer quit after a 20months. That math doesn't work.