Netflix posts positive Q1
EmptyNetflix blew past earnings expectations in the first quarter and raised its full-year profit and subscriber forecasts, but CEO Reed Hastings said competition from DVD-rental kiosks is heating up.
Kiosks rent new releases for $1 a day, and Hastings said Thursday tha many Netflix customers who cancel subscriptions cite kiosks as the reason.
"By the end of the year, kiosks will likely be our No. 1 competitor as video stores fall inversely," he told analysts, adding that the cheap rentals kiosks provide are not good for the DVD industry.
He also said new releases account for only about a third of Netflix's rentals, so kiosks can only compete with his company on a limited level.
"Our differentiators continue to be our vast selection — over 100,000 titles — the convenience of mail and streaming," he said.
Netflix posted a $22.4 million net profit in the quarter, up from $13.3 million a year ago, on revenue that increased 21% to $394.1 million.
The company ended the quarter with 10.3 million subscribers, up 10% from the fourth quarter last year and at the top end of guidance.