Netflix has attributed its fourth-quarter jump in revenue, profit and subscribers to the surging popularity of its online video streaming service.
The movies-by-mail service said it added 718,000 subscribers in the fourth quarter, far more than analysts had expected, bringing its subscriber base to nearly 9.4 million. Netflix expects the number to reach 10.6 million subscribers within the next three months, even as other parts of the entertainment business contract because of the recession. “It’s very clear that streaming is energising our growth,” Netflix Chief Executive Reed Hastings said.
The company’s streaming business was propelled by connection with devices from LG Electronics, Samsung and Microsoft that offer Netflix’s “Watch Instantly” service. Subscribers can use the service to stream any of about 12,000 television shows and movies without waiting for the DVD to arrive by mail. The company “substantially” increased its investment in streaming video – and plans to do the same in 2009, Hastings said.
“We plan to spend as much money as we can with the studios, licensing as much content as we can — and we are already one of the studios’ largest Internet revenue sources,” Hastings said. “Our spending is limited only by what content is available at reasonable costs.”