Investors have big expectations for DVD rental service Netflix (NFLX), which has been one of the few rapid growth stories during the recession, and reports Q1 results next week. Shares are up some 60% in the last 3 months — near all-time highs above $50.
Some good news in the meantime: At least the company’s Web traffic hasn’t fallen off a cliff. Data from four services — comScore, Hitwise, Compete, and Nielsen — all suggest that Netflix’s Web traffic is flat to slightly down over the last few months, having peaked in January after a huge growth spurt around the holidays.
- comScore says U.S. weekly unique visitors in March were around 6.0 million, on average. That’s down 5% from a 6.3 million weekly average in February; and down 12% from a 6.8 million weekly average in January. But still up 13% from a 5.3 million weekly average in December; and up 25% from a 4.8 million weekly average in September. Weekly traffic peaked the week of Jan. 4 with 7.3 million unique U.S. visitors.
- Hitwise says Netflix’s share of U.S. visits was about 0.12% in March, flat-to-down from January and February, but still up huge from the third- and fourth-quarter months, when it mostly lingered between 0.08% and 0.10%.
- Compete says Netflix attracted 20.6 million U.S. uniques in March, up from 19 million in February; down from 21.8 million in January; but up from 17.8 million in December and 15.8 million in September.
- Nielsen says Netflix attracted 16.2 million U.S. uniques in March, up from 15.4 million in February; down from 17.2 million in January; but up from 14.3 million in December and 14.0 million in September.
So, in summary: Flat to slightly down in March and February after a huge January, but still up big from December and earlier. We’d note that the NCAA basketball tournament probably distracted a few would-be movie-renters during March, too.
To be sure, these stats don’t tell us everything about Netflix’s business. People go to Netflix’s Web site for many reasons: To sign up for new subscriptions, to manage existing subscriptions, to stream movies, to cancel accounts, or just to look for information. And many paying Netflix subscribers don’t go to the Web site at all, sitting on DVDs they haven’t had time to watch for a month or two. (Highly profitable!)
So while a hockey-stick growth line would be ideal, it’s at least good news that Netflix has been able to maintain its traffic this quarter.
And it’s not like the company has set high expectations for the rest of the year: Of the 1.2 million to 1.9 million net subscriber additions Netflix has forecast for 2009, it predicted it would gain 700,000 to 900,000 — about half — during Q1. As of mid-February, it was well on its way, with 10 million subscribers — or already 600,000 Q1 net additions.
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