Netflix shares soared 22 percent on the Nasdaq by midday today (Thursday) to $115.46 after the company reported stronger-than-expected fourth-quarter earnings of $41 million on a whopping 43-percent increase in revenue of $876 million. The company, which was beleaguered by subscriber losses and analysts' downgrades after it substantially raised fees for its combined streaming and DVD-by-mail service, reportedly gained back 610,000 defectors (some of that number may have been newcomers to the service), who brought its subscriber list to 24.4 million. However, Netflix chief Reed Hastings said in a conference call that some 2.76 million subscribers had closed their DVD subscriptions in the quarter -- they were apparently either those who left the service entirely or signed on for the streaming-only option -- adding, "We expect DVD subscribers to decline each quarter forever." His remarks were in sharp contrast to those he made last July when he told shareholders, "Our goal is to keep DVD as healthy as possible" and step up marketing of the mail service. In fact, Hastings acknowledged, the company no longer has plans to boost rentals of DVDs. The company's plans may yet be revised if a substantial number of subscribers resume the mail service in March when they discover that virtually all new movies have disappeared from the streaming service with the Feb. 28 expiration of Netflix's deal with Starz, which includes movies from Disney and Sony.

26/01/2012