Wednesday, August 6, 2008

Netflix Users: 89% on "3 or fewer" Plans

Netflix has never given a breakdown on the number of subscribers in each type of rental plan, but using Feedflix, a site set up to allow Netflix users to track their usage of Netflix, some guesses can be made.

According to Netflix’s latest earnings report, they currently have 8.4 million subscribers. By extrapolating Feedflix’s breakdown of Netflix service plans to the larger subscriber base, we get the following estimates on where customers are spending their money, according to an investment advisor who goes by the pen name of Davis Freeberg.

1 at a time - 2.1 million subscribers
2 at a time - 2.4 million subscribers
3 at a time - 3.1 million subscribers
4 at a time - 500K subscribers
5 at a time - 168K subscribers
6 at a time - 84K subscribers

Since heavier users cost Netflix more (more postage, more DVD rentals, more handling), one would assume the profit is generated by the lighter users who rent less (less postage, fewer rentals, less handling cost).

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