Sometime on Wednesday February 11, Netflix passed the 10 million subscriber mark. This milestone was exceeded by how quickly the company reached it. During the past two months Netflix has grown by 600,000 subscribers; roughly double the rate of its previous quarter. At 1.2 million subscribers a quarter, Netflix would reach 14.5 million subscribers by the end of 2009, easily passing its projection of 11.3 million subscribers.

Many attribute the company’s quickening pace to the popularity of its video streaming service. Launched in 2007, it allows customers to watch video instantaneously on their PCs with broadband connections. This services was later expanded in 2008 to work via the Roku Player, Macs, Xbox 360s and Samsung Blu-Ray Disc players. Partnerships have also been anounced for 2009 via Tivo DVRs and Vizio and LG HDTVs. Equally vital to the device connectivity being offered with the service is the fact that broadband is now reaching roughly 60% of U.S. households.

Just as Netflix’s inital success was launched by the  popularity of the DVD platform this second stage in the company’s growth is being fueled by another rising adoption- broadband. Netflix is thus beginning a new s-curve.

There are other ways that Netflix is transforming. Using terminology from Chris Anderson’s book The Long Tail, Netflix is transforming from a ‘hybrid retailer,’ that is half digital and half bricks and mortar, to a ‘pure digital retailer,’ that has no physical inventory. Although the current streaming library is only about 10% of the total DVD library, this will surely expand in the future, thereby lowering operating costs as well as expanding customers options.

Personally, I believe this is just the beginning of a new trend in online video, which other companies like Google and Hulu are exploring, but which will come into light over the next two years as technologies further evolve and more deals get hashed out.