There are a couple things Netflix is doing right, and it has to do with technology. They were one of the early users of Server 2008 and Silverlight from Microsoft and now that is beginning to pay off well, as movies can be paid for online and streamed, which means no sending a DVD through the mail, but they still accommodate those consumers and offer that service as too so they can serve everyone at all levels of technology. When streaming via the web, there’s no postage or DVDs to create, so I think this somehow paints the picture as the online streaming could possibly help to cover the costs for sending out DVDS, and add on some Xbox services too.
From a Prior post with some of the same technology related to Healthcare:
Silverlight Blamed for Restructuring at Netflix, It works too good, Could do the same for Medical Records with Common User Interface
The story here is the reliability so with not having to mess around with sending DVDs back and forth in the mail and answering other related questions, the need for support has dropped as technology is better.
The link above is well worth reading to see how Server 2008 and Silverlight are helping in healthcare too, and why technology is so very important in what it brings to be the table, moving forward with technology. BD
Netflix dismissed the notion that the recession might have contributed to the upside surprise, noting that the churn rate ticked up nominally in the quarter," Wolf wrote in a report. "However, in our view, the sharp drop in the subscriber acquisition cost might have been driven in part by consumers substituting the far cheaper Netflix service for theater viewing."
Netflix benefited from cross-promotions with its electronic partners, such as Microsoft's Xbox 360 and LG Electronics, which stream Netflix movies to subscribers, said Jim Friedland, analyst at Cowen & Co. Friedland also cited greater subscriber cancellations that affected rival Blockbuster Inc.'s (BBI:
Netflix shares jump on strong results, outlook - MarketWatch
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