Netflix reports Q4 profit
Net income rose 25%, with revenue up 19%Netflix reported fourth-quarter financial results Monday and, in doing so, proved that there is at least one entertainment company that is thriving in the midst of a recession.
Netflix reported earnings and revenue that bested analyst predictions and the company's own guidance, and future guidance was for growth, whether the economy recovers or not.
The company that made the DVD-by-mail subscription business a phenomenon said net income rose 25% to $22.7 million and revenue was up 19% to $359.6 million.
The company added 718,000 new subscribers to nearly 9.2 million paying subscribers. Netflix predicted it will end the current quarter with up to 10.3 million subscribers and that it will end the year with as many as 11.3 million.
Netflix CEO Reed Hastings called the imminent breaking of the 10 million mark a "hugely symbolic milestone."
Hastings also said that the company's streaming VOD business is booming. The more subscribers who watch movies that way, the fewer DVDs must be mailed out, thus saving Netflix money. Netflix provides the service to subscribers at no additional charge.
"Streaming is energizing our growth," Hastings said.
Netflix has deals with TiVo, Xbox and makers of TV sets and Blu-ray Disc players to embed the Netflix VOD technology into their devices, and Hastings said negotiations are under way with "every major consumer electronics maker."
He also said 700,000 of Netflix's subscribers are asking for Blu-ray discs. He predicted a bright future for that platform, at least until 2013-18, when he thinks DVD usage should peak and VOD will be the norm.