Partnership Deals Meaningful, Not Dominant Contributor to Netflix

Partnerships with pay TV operators, internet service providers, and other service providers are valuable contributors to Netflix’s subscriber growth and could play an even larger role as the company looks more deeply into agreements that bundle in the Netflix service. Netflix doesn’t break out what percentage of new customers come through its various partnerships with ISPs and pay TV providers: they are a “meaningful contributor, but not a dominant contributor in terms of being a major channel for us in terms of acquisition,” said David Wells, Netflix’s CFO. Netflix is a “multi-impression sale,” he added. “If somebody joins us through a partner, it isn’t necessarily because that partner did a specific promotion.” Spencer Wang, Netflix’s VP of investor relations/corporate development, stressed that, given the regional nature of cable TV and ISPs, any single partnership isn’t particularly material to Netflix’s global net additions. That said, the importance of partnerships is growing as Netflix gets “embedded” into more ISPs on more consumer electronics devices, Wells said.