NetFlix 2010 Annual Report Download - page 26

The following table presents our year-end subscriber information:
As of December 31,
2010 2009 2008
(in thousands, except percentages)
Free subscribers ........................................ 1,742 376 226
As a percentage of total subscribers (1) .................... 8.7% 3.1% 2.4%
Paid subscribers ........................................ 18,268 11,892 9,164
As a percentage of total subscribers ....................... 91.3% 96.9% 97.6%
Total subscribers .................................... 20,010 12,268 9,390
Percentage change over prior period ........................ 63.1% 30.6%
(1) The 5.6 percentage point increase in free subscribers as a percentage of total subscribers as of December 31,
2010 as compared to December 31, 2009 is due to the expanded use of our one month free trial
subscriptions over the previously used two week free trials, as well as increased demand during the holiday
season.
Year ended December 31, Change
2010 2009 2010 vs. 2009
(in thousands, except percentages and average monthly
revenue per paying subscriber)
Revenues ......................................... $2,162,625 $1,670,269 29.5%
Other data:
Average number of paying subscribers .............. 14,786 10,464 41.3%
Average monthly revenue per paying subscriber ...... $ 12.19 $ 13.30 (8.3)%
The $492.4 million increase in our revenues was primarily a result of the 41.3% growth in the average
number of paying subscribers arising from the continuous improvement to our customer experience which in
turn, drives consumer awareness of our service benefits. This increase was offset in part by an 8.3% 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 69.8% as
compared to a 15.0% decline in all other plans during the year ended December 31, 2010. In the fourth quarter of
2010, when we introduced the unlimited streaming plan without DVDs, over one-third of new subscribers elected
this option.
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.
Until the average price paid by our new subscriber additions is equal to the average price paid by existing
subscribers, our average monthly revenue per paying subscriber will continue to decline. We expect lower priced
plans to continue to grow as a percentage of our subscriber base.
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