Michael Pachter, Wedbush Morgan analyst, has said that Xbox Live members are a "proverbial goldmine" for the Netflix service.
Pachter believes "super-normal levels" of subscriber growth to Netflix will continue for a while longer and they should expect "as many as" 1mil new members in the next year.
"...we think that subscriber growth will continue at super-normal levels for quite some time. We believe that the Xbox Live Gold membership is a proverbial gold mine of potential members, and expect to see as many as 1 million join as Netflix members in the next year," Pachter tells .
With over 8 million estimated Gold members of Xbox Live logging on in their living rooms, membership to Netflix is but a few clicks away. He predicts that 800,000 were already members with the rental service and that an additional 200,000 signed up in the last quarter.
"Beyond that, we note that Microsoft is still selling a large number of Xbox 360 units (we estimate that it will sell another 5 – 6 million in the U.S. in 2009), with conversion of around 35% of these owners to Xbox Live Gold membership."
It's a huge win for the rental company which has the advantage to lower costs thanks to media streaming to the consoles, and not having to send out physical discs. It's a sound strategic partnership for Microsoft too with both reaping the highly lucrative rewards.
Pachter: There's "proverbial" gold in them thar Live Netflix hills
28 January 2009 | By Simon Priest