Piper Jaffray: NFLX Device Ecosystem To Reach 175 Million

The success of Netflix, Inc. NFLX in the midst of transition to a DVD & streaming offering has been the result of multiple factors, Piper Jaffray Reports. “We believe, however, that perhaps the most underappreciated component of the past and future growth of Netflix is the creation of a massive Netflix enabled device ecosystem,” Piper Jaffray writes. “And, while the device footprint has been a factor in fueling sub growth, it has also positively altered various key metrics in the Netflix model that have driven consistent EPS outperformance. “Specifically, we believe the device ecosystem drives sub growth, reduces churn and, most importantly, reduces SAC. We estimate that by the end of CY11, Netflix will be enabled on 94 million devices that connect to a TV and 80 million mobile devices, resulting in a total Netflix device ecosystem of 175 million devices, up from our estimate of 119 million at the end of CY10.” Netflix closed Friday at $217.98.