Netflix proves pay TV isn’t dead, it’s just not cable

With cable and satellite subs flat and the telcos struggling to grow a pay TV business, online video is thriving - even the pay subscription kind. The cable guys and telcos can blame the recession, but there’s still business to be had if you give people what they want: a movie anywhere there is an internet connection for $9 a month. The combination of online viewing with a DVD in the mail, Netflix managed to grow its customer base by more than 1 million in the last quarter. If the movie studios would allow, the DVD could be done away with all together.

The results reflect the growing popularity of Netflix plans that bundle DVD rentals with unlimited video streaming over the Internet for as little as $9 per month. Netflix’s success contrasts sharply with more traditional home video options such as Blockbuster Inc. and Movie Gallery, which are closing hundreds of their stores and struggling to attract traffic to the locations still open.

Netflix added more than 1.1 million customers during the quarter — the most in any three-month period in its history. It took Netflix four years to attract its first 1 million subscribers after launching its rental service in 1999. (Yahoo)