Netflix has added a lot of subscribers in the past couple of years, posting surprising results and fending off competition from much larger corporations such as Blockbuster. However, the company has acknowledged itself that competition is coming now from other directions, particularly with kiosks.
"In exit surveys of canceling Netflix subscribers, kiosk is more and more frequently named as where they will go now for movies," Netflix Chief Executive Officer Reed Hastings said. "By the end of the year, kiosks will likely be our number one competitor as video stores fall inversely," he said, adding the "long-term effects of ubiquitous $1 new release DVD rental are not positive for us or the industry as a whole."
He is not alone in that belief either, as Hollywood studios have also raised concerns about the low prices that kiosks charge, saying it is hurting DVD retailers. When asked how Netflix plans to compete with this threat to its business, Hastings said, "We have to focus on our differentiators, such as selection, convenience and the value of unlimited streaming. We'll focus on our benefits and they'll focus on theirs."
Netflix expects to to end 2009 with 11.2 million to 11.8 million subscribers, up from a previous target of 10.6 million to 11.3 million.
He is not alone in that belief either, as Hollywood studios have also raised concerns about the low prices that kiosks charge, saying it is hurting DVD retailers. When asked how Netflix plans to compete with this threat to its business, Hastings said, "We have to focus on our differentiators, such as selection, convenience and the value of unlimited streaming. We'll focus on our benefits and they'll focus on theirs."
Netflix expects to to end 2009 with 11.2 million to 11.8 million subscribers, up from a previous target of 10.6 million to 11.3 million.
