Netflix CEO: Streaming will double subscriptions

DVD rentals to peak within decade

By Danny King -- Video Business, 5/28/2008

MAY 28 | Netflix expects to more than double its subscriber base within a decade, with video-streaming services fueling growth after DVD rentals peak, the company’s chief executive said at an investors’ conference in San Francisco today.

The U.S. movie-rental leader via mail will surpass 20 million subscribers and ultimately phase out DVD mailings, whose volume will peak between 2013 and 2018, Netflix CEO Reed Hastings said. The company said last month that its first-quarter subscriber base grew 21% from a year earlier, to 8.24 million.

“The market that can be reached through streaming is much larger than DVD,” said Hastings, who didn’t give a specific timeframe on the subscription surge. “We should be able to get well beyond 20 million subscribers.”

Netflix last week started selling a set-top box that allows subscribers to stream movies directly to their TV sets from Netflix’s Web site, marking its first foray into streaming media directly to customers’ TVs. Netflix Player by Roku, which was co-developed by digital-media technology company Roku Inc. and can be connected to the Internet via a wireless home network, sells for $99.99.

Netflix said in January that it would develop set-top streaming boxes with LG Electronics and others as it competes with a growing number of movie-streaming or download services, including Apple TV and Amazon.com’s Unbox.

Netflix's streaming service for personal computers launched last year and has since boosted its content inventory to 10,000 titles from 2,000.

Hastings said today that he hoped that partnerships with various consumer-electronics companies such as Roku would help enable as many as 10 million customers to have TVs that could connect to Netflix via the Internet by the end of next year.

“We named our company ‘Netflix’ and not ‘DVD By Mail’ for a reason,” Hastings said.