Tuesday, January 27, 2009

Netflix to test weekend shipping of DVDs

While Netflix crows about its progress in digital delivery of movies over the Internet, the company continues to invest in its core business of delivering DVDs by mail.
During a call with analysts to discuss the company’s fourth-quarter earnings on Monday, Netflix CEO Reed Hastings spoke about efforts to speed delivery of DVDs and high-definition Blu-ray Discs to customers.
“While our streaming success is exciting … we continue to invest in improving our DVD-by-mail experience. There’s a lot of top- and bottom-line growth left in online DVD rental,” Hastings said.
Netflix now has nearly 60 distribution centers across the U.S. and can provide next-day delivery to over 97% of its subscribers.
And this quarter, Netflix is going to be testing weekend shipping in certain parts of the country to improve service, Hastings says. Netflix currently does not process shipments on Saturday, which has slowed the turnaround of discs for subscribers around weekends.
As for the transition to high-definition video discs, Netflix now has about 700,000 subscribers renting Blu-ray Discs. That’s up from about 500,000 the previous quarter.
Netflix on Monday reported better-than-expected results for the fourth quarter. It ended the quarter with 9.4 million subscribers for its DVDs-by-mail and streaming video service, up 26% from a year ago. (See story in IBD.)
Netflix expects to end 2009 with 10.6 million to 11.3 million subscribers.
(Photo from Lolcats.)

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