Analyst: Xbox 360 is a "Gold Mine" for Netflix


As if a 45 percent profit increase wasn't enough good news, analysts are now saying Netflix has yet to reach its full potential.

Earlier this week, Netflix announced that its quarterly profits were up 45 percent, and it would soon hit the 10 million mark in subscriptions. Chief financial officer Barry McCarthy attributed much of his company's recent success to the streaming service Netflix offers. While still offering the DVD/Blu-ray through mail service the company was founded upon, Netflix also allows its users to stream movies through a myriad of options, including its own Roku box, Microsoft's Xbox 360, select Blu-ray players, and any computer with a broadband internet connection. By streaming content over the internet, Netflix has seen a dramatic decrease in operation costs because it is shipping less movies through the mail.

So while the streaming service, which is based on Microsoft's Silverlight technology, is already a hot ticket service, one analyst believes its barely skimmed the surface. Michael Pachter, an analyst with Wedbush Morgan, Pachter believes the Xbox 360 will play a vital role in the continued success of Netflix. Anyone with an Xbox LIVE "Gold" membership (which costs $50 for 13 months), can either open a new Netflix account through their Xbox 360 or attach their already existing Netflix account to it. Those who use Netflix through their Xbox 360 can mow watch any number of films or TV shows on their TV.

"We believe that the Xbox Live Gold membership is a proverbial gold mine of potential [Netflix] members, and expect to see as many as 1 million join as Netflix members in the next year," said Pachter. "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."

So if you're already using a Gold LIVE subscription to play Gears of War 2 and Madden 09 on your Xbox 360, take a minute away from gaming and check out the streaming service for yourself.