Reports of Netflix's death are exaggerated
Company posts better-than-expected results and shows that, despite all the drama, subscriber levels have stabilized.
Profit at the Los Gatos, Calif., company fell 13% to $40.7 million, or 73 cents a share, from $47.1 million, or 87 cents a year earlier. Revenue rose 47% to $875.6 million as the company was able to quell a customer revolt over an unpopular fee hike. Analysts expected profit of 55 cents on revenue of $857.89 million.
One great quarter won't earn Wall Street's forgiveness, but it sure is a good start. Among the good news in the quarter were stronger-than-expected increases in Netflix's video-streaming business. As of the end of the quarter, that business had 21.67 million customers, an increase of 220,000 from the third quarter.
Even the DVD rental business, which is fading, performed well.
Netflix shares rose nearly 14% in after-hours trading to $108.10.
The company said it saw fewer streaming cancellations, as well as a lower migration to DVD-only plans. "While DVD members declined sharply over the last two quarters, the weekly rate of DVD cancellations has subsided from peak levels in September," Netflix said in a statement.
CEO Reed Hastings still faces huge obstacles to future growth, including rising costs for content -- particularly as the company pushes into developing original and exclusive programs.
Rivals have seized upon miscues last year that caused 800,000 customers to quit the service Hastings founded in reaction to his poor treatment by Blockbuster. If he can rebound from his blunders, Hastings' strategy will be studied in business schools for generations to come.
Netflix has its limits but I tried Vudu and it has too many commercials and is unstable. I tried to look into Hulu and it's too expensive. From what I understand Amazon use contend from Netflix.
All in all and for the moment the best service is obtained from Netflix. They need to widen their selections but if we leave they wont be able to do it.
It's a dog eats dog world.
This week, another library of films evaporated.
The poor service in South America and UK is being avoided.
Is the source of your dubious information only from Netflix ?
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The solid report comes a month after the retailer closed all of its Canadian operations.
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