Online DVD rental sees record quarter
Looming competition from the likes of Blockbuster and Wal-Mart hasn’t stopped Netflix from racking up healthy third-quarter gains.
The Los Gatos, Calif.-based online DVD rental shop announced a record quarter of revenue and sub growth for the period ended Sept. 30, with sales up 77% over the same period a year ago to $72.2 million. Netflix ended the quarter with 1.29 million subscribers, a gain of 144,000 over the second quarter, during which it also reduced its churn to 5.2% compared to 7.2% a year ago and 5.6% in the second quarter.
The 5-year-old company reported net income of $3.3 million, reversing a similar level of loss a year ago.
Netflix’s library counts more than 15,000 DVD titles. For just under $20 per month, subscribers get unlimited access, provided they rent no more than three movies at a time. There are no late fees or due dates.
Strong sub gains should fortify market leader Netflix as it faces heavy marketing pressure from Blockbuster’s FilmCaddy and Walmart.com.