updated 05:30 pm EDT, Mon July 25, 2011
Netflix talks Facebook tie-in and prices in Q2
Netflix in discussing its spring results (PDF) confirmed plans for a Facebook integration feature, albeit with limits. The company planned to allow sharing video recommendations over Facebook before the end of the summer. To avoid possible legal ramifications from the US' Video Privacy Protection Act, however, the company planned to serve Canada and Latin America at first.
Ambiguous wording in the VPPA made it a legal risk, Netflix said.
The video rental service also deemphasized the impact of its effective rate hikes for most viewers. It expected that revenue would only grow slightly during the summer as subscribers either cancelled or opted for a cheaper tier than they had been using before. A recovery was expected in the fall.
Netflix has been showing mixed results. It now has a total of 24.6 million subscribers in the US and another million in Canada, both in line with expectations, but the lowered hopes for the summer of $828 million in revenue and no more than $1.07 earnings per share were lower than what investors were hoping for.
The results also showed how much of its strategy now leaned on streaming. By the end of the summer, Netflix expected 22 million of its subscribers to have streaming in their plans, either by itself or with DVDs included. The largest group, 12 million, would have both while 10 million were streaming only. Just three million would only be using DVD rentals.
Streaming is not only less expensive for Netflix to run but is also key to much of its ubiquitousness. Netflix is available on many TVs, set-top boxes, and Blu-ray players along with every major video game console, all iOS devices, and some Android hardware. DVDs and Blu-ray movies have stayed on mostly to fill out the catalog for those who want more recent movies but have been less essential as the catalog fills out.