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Netflix, Inc. (NFLX) Message Board

  • Younessi Younessi Jan 22, 2004 12:52 PM Flag

    Wow margin is going down!!!

    Notice SAC was up $1.09 from last qtr. Also know that the only reason the churn was below 5% this qtr was becuase of the reduced price offering the give to any sub who tries to cancel. I would advise all the current sub to go thru the cancelation process and pick up the reduced price to save you $5 a month.


    Netflix said gross margins in the fourth quarter slipped to 45.2% from 46.5% in the third quarter because of content costs.

    Meanwhile, the cost to acquire new customers during the fourth quarter was $ 32.89 for each trial subscriber, down from $33.31 during the year-earlier period. But with increased costs for developing television advertising, the cost per customer acquisition rose by $1.09 from the third quarter.

    The company expects subscriber acquisition costs to rise in the first quarter to between $34 and $36 a subscriber from $32.89 in the fourth quarter with a churn rate of 4.8% to 5.3%.

    Subscriber acquisition costs are expected to be $34 to $36 a subscriber for the year.

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    • >Notice SAC was up $1.09 from last qtr.

      TV ad campaign.

      >Also know that the only reason the churn was >below 5% this qtr was becuase of the reduced >price offering the give to any sub who tries >to cancel.

      Your assumption, not a fact.

      >I would advise all the current sub to go thru >the cancelation process and pick up the >reduced price to save you $5 a month.

      Why should the inconvenience themselves even 2 minutes so that you can unbury your massive losses so far?

      >Meanwhile, the cost to acquire new customers >during the fourth quarter was $ 32.89 for >each trial subscriber, down from $33.31 >during the year-earlier period. But with >increased costs for developing television >advertising, the cost per customer >acquisition rose by $1.09 from the third >quarter.

      And churn continues to decrease, meaning each one of those customers acquired by paying the SAC goes further.

 
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