A Million BD Subscribers for Netflix; Disc Rentals Expected for 20+ More Years

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From Blu-ray.com:

Based on data given by Netflix during yesterday's Q3 2009 earnings call, it follows that the rental company is approaching or has passed a million Blu-ray subscribers, in what is twofold growth in less than a year, despite having increased subscription rates for BD twice, in October 2008 and April 2009.

The company didn't give a hard figure for Blu-ray subscribers, but it did say that it had 11.1 million total subscribers as of September 30, and in answer to one of the analysts, Netflix CEO Reed Hastings informed that the percentage of users that are on Blu-ray subscription had "stayed pretty steady for us just under 10%." Simple arithmetic tells us that the number of Blu-ray subscribers must then be very close to a million, give or take a few thousand.

In December 2008, Netflix announced it had hit 500,000 Blu-ray subscribers. By the end of the year, Netflix had 700,000 Blu-ray subscribers (out of 9.4 million total subscribers).

While articles on the demise of discs are published every day, Hastings said he was "struck" by the fact that they expected Netflix's postal expense to be approximately $600 million and growing, as disc shipments increase with no flattening in sight - in 2011 postal expense is expected to be over $700 million.

Netflix has just spent $40 million for rental return machines that can accept the returning DVDs, open them, clean them, inspect them, and prepare them for reshipment. These machines will be installed over the next 18 months, with a view to saving money and improving service quality. Hastings said that this investment makes financial sense "because our DVD shipment volume is still growing and we expect to be renting DVDs until 2030."