One of the great success stories in the movie rental business over the last decade has been by-mail and streaming renter Netflix. The company’s subscriber base has almost tripled since 2005, and stock analysis service Trefis is forecasting that Netflix will grow from 14 million subscribers at the end of 2010 to 28 million by 2016.
Trefis cites the following reasons for its forecast of continued growth, albeit at a slightly slower rate, by Netflix over the coming years:
- Netflix is witnessing great demand for its $8.99 a month plan, which includes renting unlimited DVDs (one at a time) and access to unlimited streaming service. The value proposition is quite strong to many customers, encouraging them to subscribe.
- Netflix is continuing to invest in its online movie streaming service which will position the company to attract more customers that prefer online viewership.
- Netflix has over 100,000 movies in its DVD catalog and about 17,000 online streaming titles. This depth of content gives Netflix an edge over its competitors.
Insiders, how do you see Netflix’s value proposition stacking up to those of its competitors, including Redbox? Will this forecast hold true, especially in the face of heightened competition in the increasingly crowded VOD business?