In a rare piece of good business news, DVD rental business Netflix reportedly enjoyed a 45% spike in profits in the fourth quarter of 2008. The number of subscribers grew by 27 percent in 2008 and now totals more than 9 million people. Here's more info, from Variety:
[Netflix] Profits reached nearly $23 million and revenue rose 19% in the quarter to $360 million. The cost of acquiring a subscriber dropped 23% to $26.67. Netflix now predicts its subscriber base will crack the 10 million mark by the end of the first quarter.
For reasons I totally don't understand, Netflix shares fell 29¢, or about 1%, to close at $30.15.
I've had Netflix for years and I love it, mainly because of the wide selection of obscure movies. Now, with the company's in-roads into streaming video, it's looking like they might own the "renting movies" market for years to come. Often, the first business that starts a new idea falls to a better, more efficient company that follows. For instance: Friendster was the first social networking site, but it has been largely overtaken by MySpace and Facebook. Is there some upstart movie-rental house I haven't heard of that is poised to topple Netflix?