NetFlix 2009 Annual Report Download - page 38

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Year ended December 31, Change
2009 2008 2009 vs 2008
(in thousands, except percentages and average monthly
revenue per paying subscriber)
Revenues ........................................... $1,670,269 $1,364,661 22.4%
Other data:
Average number of paying subscribers ............... 10,464 8,268 26.6%
Average monthly revenue per paying subscriber ........ $ 13.30 $ 13.75 (3.3)%
The $305.6 million increase in our revenues was primarily a result of the 26.6% growth in the average
number of paying subscribers arising from increased consumer awareness of the compelling value proposition of
streaming and DVDs by mail for one low price and other benefits of our service. This increase was offset in part
by a 3.3% decline in average monthly revenue per paying subscriber, resulting from the continued growth in our
lower priced subscription plans. The total number of average paying subscribers in our 1 and 2-out plans grew by
48.1% as compared to a 1.1% decline in all other plans during the year ended December 31, 2009.
Year ended December 31, Change
2008 2007 2008 vs. 2007
(in thousands, except percentages and average monthly
revenue per paying subscriber)
Revenues .......................................... $1,364,661 $1,205,340 13.2%
Other data:
Average number of paying subscribers ............... 8,268 6,718 23.1%
Average monthly revenue per paying subscriber ........ $ 13.75 $ 14.95 (8.0)%
The $159.3 million increase in our revenues was primarily a result of the 23.1% growth in the average
number of paying subscribers arising from increased consumer awareness of the compelling value proposition of
streaming and DVDs by mail for one low price and other benefits of our service. This increase was offset in part
by an 8.0% decline in average monthly revenue per paying subscriber, resulting from the continued growth in our
lower priced subscription plans, as well as a price reduction for our most popular subscription plans during the
third quarter of 2007. The total number of average paying subscribers in our 1 and 2-out plans grew by 39.8% as
compared to 6.1% in all other plans during the year ended December 31, 2008.
Until the average price paid by our new subscriber additions is equal to the average price paid by existing
subscribers, we expect our average monthly revenue per paying subscriber will continue to decline, as the lower
priced plans grow as a percentage of our subscriber base. This decline could be partially offset by the growth in
the number of subscribers electing to receive Blu-ray discs for a surcharge as described above. Our revenues and
average monthly revenue per paying subscriber could be impacted by future changes to our pricing structure
which may result from competitive effects that we are unable to predict.
The following table presents our year-end subscriber information:
As of December 31,
2009 2008 2007
(in thousands, except percentages)
Free subscribers ........................................ 376 226 153
As a percentage of total subscribers ....................... 3.1% 2.4% 2.0%
Paid subscribers ........................................ 11,892 9,164 7,326
As a percentage of total subscribers ....................... 96.9% 97.6% 98.0%
Total subscribers .................................... 12,268 9,390 7,479
Percentage change over prior period ........................ 30.6% 25.6%
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