Is Netflix Really Bigger Than Comcast?

Netflix (NFLX) released its quarterly earnings earlier this week and, while the market was somewhat underwhelmed, subscriber numbers are impressive. In fact, GigaOm declares, “Netflix Now Officially Has More Subscribers Than Comcast.”

Indeed, at first blush, Netflix’s 23.6 million subscribers does exceed Comcast’s 22.8 million. But what exactly does that suggest and is it a reasonable comparison?

From a financial stand point, the proclamation doesn’t hold water as Comcast’s revenue is orders of magnitudes larger than Netflix’s. And it’s not like these two are necessarily direct competitors. Sure, there’s a cord cutting contingent that relies on Netflix to augment their “television” viewing. But many subscribe to both pay television services and Netflix, as I do. Additionally, Netflix is available nationwide whereas Comcast only operates in select regions. So, perhaps a comparison to HBO’s 28+ million subscribers is more appropriate. But, again, these movie services are not mutually exclusive.

At the end of the day, Netflix’s success and service is admirable (although its streaming content catalog is still lacking), and illustrates folks are seeking out alternate distribution methods. Yet, at the end of the day, its rise seems inversely proportional to the demise of Blockbuster’s retail video rental business, rather than a large scale assault on the established premium TV providers.

This post was originally published on the Dice Blog Network.

3 thoughts on “Is Netflix Really Bigger Than Comcast?”

  1. “From a financial stand point, the proclamation doesn’t hold water as Comcast’s revenue is orders of magnitudes larger than Netflix’s. “

    Well, if one wants to be financial about it, go with market cap, which is the crowdsourced guess of what a company is actually worth going forward.

    Netflix is at 12B to Comcast at 72B. So Comcast is six times bigger, which is a respectable showing for Netflix.

    “So, perhaps a comparison to HBO’s 28+ million subscribers is more appropriate.”

    Yup. If you want to count subscribers, than is an appropriate comparison. However, if you guesstimate the ASP of HBO at $15, compared to the $8 of Netflix, then HBO’s ASP x subscribers is still comfortably ahead of Netflix’. And that doesn’t get down into the weeds into whatever Netflix has to pay on IP fulfillment per customer, which I assume HBO gets for free beyond whatever ASP they charge the MSO.

    In short, Netflix is a roaring success, but they’re still not on the scale of a Comcast or an HBO.

    Of course, Amazon is bigger than Comcast, but that’s a whole ‘nother swarm of eels…

  2. Netflix charges from $9 a month for streaming or around $14 for a one disk plan. Compare that to Comcast which charges around $100 a month for their TV plan and you can see why “Comcast’s revenue is orders of magnitudes larger than Netflix’s”.

    It’s fairly obvious Comcast charges way more than they need to be profitable considering they have enough money to buy NBC-Universal and hire multiple celebrity spokespersons.

    Comcast is simply interested in making a profit and uses their natural monopoly status in most areas to keep customers, which is why they tend to have low customer satisfaction ratings.

    Netflix has no monopolistic advantages so it needs to keep it’s customers happy to keep them. Netflix is happy enough making a small profit per customer and gaining subscribers, thereby making money in volume. Unfortunately I don’t see Netflix ever replacing cable companies simply because the movie and TV studios hate Netflix and won’t give them the rights to stream new content. If they did, I think the cable companies would have to lower prices to compete or lose their TV business.

  3. A lot of people rely on Comcast for their internet service, so not only are they not direct competitors, they depend on Comcast for many people, and also have to hope they’re not bandwidth capped or rate shifted out of practical utility.

    I’m fortunately a Fios customer now, but my old cable co has/had a ridiculous cap and I got a nastygram in the mail from them the first month I tried Netflix streaming. Couldn’t use them for much at all.

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