The Real Cost of Netflix Streaming is the Movie, Not the Bandwidth
Now here’s one you might not have predicted (or maybe you did), Netflix’s costs on licensing streaming movie exceeds the bandwidth. NOW, the question that remains is, as the features of streaming and quality improve requiring more bandwidth, does it hit into their profits greater?
According to its 10-K filing,
Netflix spent $66 million in the second quarter 2010 to license
streaming titles for its Watch Instantly service, compared with just $9
million that was spent in the prior-year period. (Hat tip to CNET)
The acquisition of new and better content has helped drive its
subscriber numbers up 42 percent over the past year, with 15 million
subscribers at the end of the second quarter, compared with 10.6 million
a year earlier. In addition, those subscribers are watching more
streaming content than ever, with 61 percent using the service, compared to just 37 percent a year earlier.