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Netflix, Inc. Message Board

  • 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).

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    • 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.

    • Red Herring: What�s the average time a customer stays with you?

      Hastings: About 20 months. And customer acquisition costs are pretty low, about $30 to $35 each.

      Red Herring: How big of a concern is movie piracy?

      Hastings: Huge. Certainly one of our biggest over the next 20 years. If piracy guts the movie industry, it guts us. And we should do everything we can to make sure that doesn�t happen.

      Red Herring: So what happens in a year or two when Wal-Mart says �Why don�t we just buy Netflix?� Is there an exit strategy?

      Hastings: Well, can you name even three companies Wal-Mart has bought?

      Red Herring: No�

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