It seems that people staying home and nesting to save money during the recession is really paying off judging from these quarterly numbers. I mean people out of work or cutting costs are going to nest as much as possible.
Netflix believes the weakening economy is still working in its favor. Management predicted it will attract 700,000 to 900,000 more subscribers during the current quarter, yielding earnings ranging from 25 cents to 33 cents per share on revenue of $387 million to $393 million.
I think some of this growth is from Xbox360 users using Netflix's streaming video option to "Watch it Now." I haven't used this feature much since I have the 3 DVD plan right now and it pretty much gives me all the DVDs I have time to watch at any given time. I do see myself using this more if I wasn't using my Xbox360 to play games.
Also I think Netflix is finally becoming the movie service of choice with many Americans. Blockbuster has always forced you to waste gas, park, and then stand in a line to rent movies. I know they have a Netflix-like mail service but it just isn't as popular for whatever reason. Blockbuster now offers a streaming service but it seems it is pay-per-view and not all you can watch like Netflix is.
So this recession might be the right time to cement Netflix as the leader in both mail-order DVD rentals and streaming rentals as well. The more nesting and saving that people do the more likely they will be saying "I'll just Netflix that movie instead of seeing it at the theatre or getting it from Blockbuster." I have been saying this for years but maybe a critical mass of Americans will be saying it as well.
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