PS3 Netflix 'Driving Significant Subscriber Growth,' says Pachter

Last October, Sony finally reached an agreement to include Netflix streaming movies on the PS3. Nintendo more recently also reached a deal with Netflix to add the service to the Wii, but Wedbush Morgan analyst Michael Pachter doesn't think that many Wii owners will take advantage of it. In an investor note today, Pachter did comment that the PS3 deal seems to have worked out nicely for Netflix, even though it's not built into PS3's XMB interface.

"The robust subscriber guidance for Q1 suggests to us that the recent PS3 partnership is driving significant subscriber growth, and it is likely that the Xbox 360 deal continues to contribute a large number of new subscribers as well," he said. "Based upon comments in the earnings call yesterday, it appears that Netflix’s exclusive relationship with Microsoft on the Xbox 360 will end in November (after two years), allowing the service to be accessed via the PS3 dashboard later this year. Some time this Spring, Netflix will be available (in standard definition) on the Wii platform, and even at a lower adoption rate, it is likely that there is significant room for subscriber additions from both the PS3 and the Wii during 2010. All of this activity will ultimately wane, but we expect any declines in subscriber additions from the three consoles to be offset by increased activity on other consumer electronics devices, particularly as price drops for such devices continue."

Netflix ended its fourth quarter with 12.27 million subscribers, and Pachter expects that increased video store closures should further benefit the company in the near future.