Neflix (NFLX) is Moving to Regrow Its Most-Profitable Service: DVDs
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A long time ago in a land far, far away, Neflix (Nasdaq: NFLX) wanted to kill off its DVD business. That appears to be even more of a fairy tale nowadays.
One of our staff recently received a promo email from Netflix which offered a free month of DVD rentals. Thereafter, the service would cost the usual $7.99 per month.
The promo came following Netflix's forth-quarter results, which showed that the drop in DVD subscribers is nearing an asymptote. From a drop of 2.76 million in Q411, losses have slowed to just 380,000 last quarter. Total paid subs are at 8.05 million, generating about $250 million of revenue per month. In fact, DVDs contributed 50.1 percent to margins, from 48.2 percent the prior quarter.
Netflix attempted a split in Summer 2011, with CEO Reed Hastings issuing an apology.
Given how much it contributes to profit, investors should hope that Netflix is able to regrow this business segment. Shares are up 3 percent Friday.
One of our staff recently received a promo email from Netflix which offered a free month of DVD rentals. Thereafter, the service would cost the usual $7.99 per month.
The promo came following Netflix's forth-quarter results, which showed that the drop in DVD subscribers is nearing an asymptote. From a drop of 2.76 million in Q411, losses have slowed to just 380,000 last quarter. Total paid subs are at 8.05 million, generating about $250 million of revenue per month. In fact, DVDs contributed 50.1 percent to margins, from 48.2 percent the prior quarter.
Netflix attempted a split in Summer 2011, with CEO Reed Hastings issuing an apology.
Given how much it contributes to profit, investors should hope that Netflix is able to regrow this business segment. Shares are up 3 percent Friday.
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