Yesterday, Netflix reported its second quarter 2011 financial results. The company that provides media rental services announced that it hit 25 million registered members in the past quarter. 24.6 million of those members are registered inside the United States, with the reminder being international users.
We are happy to report that Q2 was another great quarter for Netflix. Streaming is continuing to grow rapidly, and with the recently introduced price changes, we'll be able to further increase the scope and quality of our streaming content. At the end of the quarter, Netflix had over 25 million global subscribers, up 70% from 15 million just one year ago.
Netflix said that it added 1.8 million members in Q2, helping it push past the 25 million milestone. The company posted a revenue of $789 million with a net income of $68 million. Both of these numbers are records for Netflix.
Netflix also made a statement on its recent decision to separate the physical DVD and streaming rental plans into two:
With the rapid adoption of streaming, DVD shipments for Netflix have likely peaked. Also, in Q2 the total number of subscribers who were on hybrid plans (and, therefore eligible to receive DVDs) declined slightly from Q1.
We've spoken frequently of how we are directing savings generated from declining DVD demand into additional streaming content and marketing. During the quarter, we substantially increased sequential spending on streaming content as titles from our new content deals (discussed below) became available for streaming. At the same time, though, we maintained a disciplined approach to what content we license and at what price, spending somewhat less on streaming content than we budgeted for in the quarter. Also, DVD shipments came in even lower than forecasted, in part due to the popularity of our streaming only plan.
Some subscribers will cancel Netflix or downgrade their Netflix plans. We expect most to stay with us because each of our $7.99 plans is an incredible value. We hate making our subscribers upset with us, but we feel like we provide a fantastic service and we're working hard to further improve the quality and range of our streaming content in Q4 and beyond.
The company believes that its DVD rental plan subscriber base has peaked as a result of the changes. As a result of separating the plans, Netflix believes that it will have "22 million people subscribing" to its streaming service, "about 15 million people subscribing" to its DVD service, and "about 25 million total U.S. subscribers (with about 12 million people subscribing to both streaming and DVD)."
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