What the internet did for snail mail and print news, Netflix (NASDAQ:NFLX) is doing to cable companies and movie rental stores. Netflix finished Q1 with 22.80 million subscribers, just ahead of Comcast (NASDAQ:CMCSA) at 22.76 million subscribers. However, the big difference lies in the overall trend, with Netflix landing over 9 million new subscribers over the last year, during which Comcast lost 700,000.
While it’s true Netflix (NASDAQ:NFLX) doesn’t exactly offer the same services one receives from cable providers, that doesn’t mean they’re not competitors. Netflix has the benefit of being a great deal cheaper. The internet-only service, which allows for live streaming of thousands of movies and television shows, only costs $7.99 per month. Add $2 per month more and you will have access to even more movies and television shows to be delivered by mail.
Compare that to to the $29.99 a month it costs for a standard cable package through Comcast, a price that only lasts for the first 12 months, after which you will see your monthly statement greatly increase. That package includes free HBO for six months and no other premium movie channels — those cost extra. Now consider that HBO tends to recycle the same two dozen movies throughout the month, that watching them on your own time requires you pony up the extra cash for DVR (NASDAQ:TIVO), and you’re looking at a substantially larger bill than with Netflix.
Yes, the latest episodes of your favorite shows aren’t available on Netflix. However, many of them are available online streaming via Hulu.com (NYSE:GE) or the network websites. The few that aren’t can usually be purchased on iTunes (NASDAQ:AAPL) or Amazon On Demand (NASDAQ:AMZN) if you don’t have the patience to wait for them to be available on Netflix.
Also, at any given time Netflix (NASDAQ:NFLX) has thousands of movies to choose from, which can be viewed at any time, paused and returned to, with no due date or late fees, and without dealing with the dagger stare of the pimply boy who works the register at Blockbuster (PINK:BLOAQ). You even benefit from the personalized recommendations, where I have found many wonderful films I’d never heard of before. Not only does Netflix learn what you like, but for film geeks like myself, there are more foreign and independent films available on Netflix than you’ll ever find on HBO, at Blockbuster or Redbox (NASDAQ:CSTR).
Last year, I found myself with a couple months of free cable through AT&T (NYSE:T) as a part of a promotion they were doing to introduce people to their services (they were new to the area). Yet I found myself rarely using it. The inconvenience of sitting through advertisement breaks that waste almost a third of one’s TV watching time and having to keep track of what time and what channel all of my shows were on — it all seemed a bit ridiculous for a pursuit that is meant to be leisurely and relaxing.
I watch TV when there is nothing else to do, so why would I drop what I’m doing to be home in time for Mad Men (NYSE:LGF)? I’ll admit the movie channels were nice for the first few weeks, until I’d watched everything that really interested me. And that was before I’d been introduced to Netflix. Yes, sometimes I miss sitting in front of my TV and watching the Travel Channel (NASDAQ:DISCA) all day, but Netflix has every season of “Anthony Bourdain: No Reservations”, so I’m happy.
Ideally we’d be able to have some combination of everything at a reasonable price, but we’re not exactly living in an ideal world. If I’m going to spend $4 a gallon on gas, I’m not going to be throwing away money on something I barely use. It just doesn’t make fiscal sense. And just think of all the extra time you’ll have if you’re not spending 18 minutes of every viewing hour watching ads. You could knit a sweater or learn to play the tuba … or do as I have done and find yet another show to watch.