Print 21 comment(s) - last by TakinYourPoint.. on Jan 27 at 1:15 AM

Netflix CEO Reed Hastings  (Source:
The company also ended with 24.4 million subscribers

Despite the turbulent year much of 2011 turned out to be for Netflix, the video streaming giant reported impressive fourth-quarter earnings with a nearly 50 percent revenue increase since Q4 2010. 

In the three months ended December 2011, Netflix posted a revenue of $876 million, which was a 47 percent increase from Q4 2010, and was $19 million higher than analyst predictions. The company made $40.7 million, or 73 cents per share compared to $47.1 million, or 87 cents per share in Q4 2010.

Netflix finished 2011 with 24.4 million subscribers, which was an increase from 23.8 million at the end of September. There was a total of 21.7 million streaming subscribers in the U.S. ending 2011.

The DVD-by-mail aspect of Netflix is on a constant decline, with only 11.2 million DVD subscriptions in December 2011. About 8.4 million customers subscribe to both video streaming and DVD-by-mail. Netflix predicts that the 11.2 million number of DVD subscribers from December will drop to 9.7 million in March 2012.

"We expect DVD subscribers to decline every quarter forever," said Reed Hastings, Netflix CEO.

For 2012, Netflix expects to produce an annual loss for the first time in 10 years. It predicts a Q1 2012 loss of 16 cents to 49 cents per share. Analysts expect a first-quarter loss of 29 cents per share.

Netflix believes its Q1 2012 revenue will be between $842 million and $877 million. Analysts see an $849 million revenue in the coming months.

Netflix was booming with popularity early in 2011, but when July came around, the company decided to raise prices and change plans. The video streaming and DVD-by-mail services were separated for $7.99 a piece, or customers could choose to continue receiving both for $15.98 instead of the old price of $9.99. Netflix explained that it had to raise prices in order to pay for the increased costs of streaming rights.

The price increase outraged customers, but the changes didn't stop there. Netflix went on create a DVD spinoff company called Qwikster, where subscribers would be forced to have a separate account with separate billing if they wanted to use the DVD-by-mail option. Less than a month later, after receiving loads of criticism, Netflix killed the Qwikster idea.

A few other unfavorable instances occurred as well, such as the loss of Starz content (come February) when it refused to renew its distribution deal with Netflix, and the limitation of one stream per subscriber. In September 2011, Netflix lowered its Q3 U.S. subscriber forecasts from 25 million to 24 million, and in October, the company reported a loss of 810,000 U.S. customers during that time.

Despite these troubles, the latest Q4 earnings report shows that Netflix is picking itself up and dusting off the troubles of mid 2011. It will likely take a little more time for the company to heal entirely from the blows of 2011, but this is a start. The company has some fresh beginnings in the works for customers, such as the launch of original programming in February, where Netflix will premiere "Lilyhammer."

After the release of the Q4 2011 report, Netflix shares skyrocketed 16 percent, or $15.08, to $110.12 in after-hours trading. It ended regular trading with a 2.6 percent increase, or $2.37, to $95.04.

Source: Netflix

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My biggest complaint about netflix...
By inperfectdarkness on 1/26/2012 10:23:38 AM , Rating: 2
It's not the selection, it's the access. Netflix is still regionally locked--and I'm sick and tired of having to improvise ISP loopholes to continue to utilize my paid subscription service when I'm located anywhere other than in the lower-48.

I'm a legal US citizen, my bank is here, my bills go here, my tax returns go here. Yet according to netflix, because I'm physically not here...I'm not allowed to utilize the service I'm paying for.

By kattanna on 1/26/2012 10:45:18 AM , Rating: 3
thats not the fault of netflix, but because of studio licensing issues.

RE: My biggest complaint about netflix...
By x10Unit1 on 1/26/2012 10:54:47 AM , Rating: 3
To be fair, they might not have the rights to stream content outside of the US.

RE: My biggest complaint about netflix...
By mackx on 1/26/2012 4:57:07 PM , Rating: 2
they're in the UK now and i've signed up. i like it tbh. better than i thought.

i don't though, see the point of limiting access if you're outside of approved regions. i'm paying for access in the UK but if i go to (as an example) France then i'm not allowed anymore? it should still let me stream as it's still a valid account.

anything else and you're basically pushing people into the only alternative to get content they want - piracy. i'd probably still be pirating PC games like in the old days if it wasn't for steam (i heart steam)

p.s Reclaimer77 and your region locked comment?

who the hell has a dvd player that doesn't ignore region locks anymore? my 1st dvd player in the late 90s was region free ffs.

By Reclaimer77 on 1/26/2012 7:39:17 PM , Rating: 2
p.s Reclaimer77 and your region locked comment? who the hell has a dvd player that doesn't ignore region locks anymore? my 1st dvd player in the late 90s was region free ffs.

My point was that the expressed intent of the content owners was to region lock content. The fact that this has been bypassed for a while isn't the issue. Just saying, it's not a travesty if Netflix is forced to uphold this practice. It's nothing new.

By Keeir on 1/26/2012 8:07:39 PM , Rating: 3
I guess the point is who to be upset at.

Netflix is acting according to the requirements of the copyright holders legally. Does it suck? Yet. But blame the copyright holders... not Netflix.

By Reclaimer77 on 1/26/2012 2:59:53 PM , Rating: 2
Uhhh technically DVD's are region locked as well lol. Think about it. Try to play a Region 1 DVD in China and see what happens.

By TakinYourPoints on 1/27/2012 1:15:07 AM , Rating: 2
Blame movie studio terms. It's a shame, they encourage piracy with how they restrict online services that are easy to use. Content provers for iTunes and Steam are much more amenable, and the result has been content providers getting at least some money that they wouldn't have otherwise.

The studios should give more leeway to streaming services, make it easier for customers to pay subscription fees than it is to browse torrent sites. That's how it works for music and games now, and it works reasonably well.

I don't understand the Netflix hate
By troysavary on 1/26/2012 12:27:23 PM , Rating: 2
Where else, other than torrents, are you going to find as much to watch for the price?

By PitViper007 on 1/26/2012 3:18:44 PM , Rating: 2
No where at this point. I'll admit, I wasn't happy with the rate hike when it came, but I still think that for what you get it's a reasonable price. I'm actually considering dropping my cable and just go with streaming in the house. The kids basically only watch Netflix now anyway, and most of what I watch I can get elsewhere off the net.

RE: I don't understand the Netflix hate
By ketchup79 on 1/26/2012 4:06:37 PM , Rating: 2
I would be much happier if the thing worked better on the wii. It works great on the PC, but on the wii I am plagued with slowed load times more often than not. And I am pretty sure it is due to the software Netflix loads on the wii, as it got worse with the latest "software update."

By Trisped on 1/26/2012 4:52:29 PM , Rating: 2
It could also be the relatively week hardware in the Wii. Better compression ratios would require more processing time before presentation. Also, updated encryption algorithms may be required by media providers which would also slow things down.

By Trisped on 1/26/2012 4:53:46 PM , Rating: 2
Hulu is free.

No wait, wrong price point. They have a $7.99 subscriptions service. No wait, I don't think they have as much content... though I think they have WAY more shows, and current ones too.

Still have my Netflix, Online only.
By Denigrate on 1/26/2012 9:08:07 AM , Rating: 2
Though I tried to talk my wife into dropping Netflix, I still have it. We also do the Amazon Prime, and I figured I wouldn't miss Netflix. However, some shows I wanted to see have been added to Netflix, and they keep adding stuff for my kids to watch so i guess we'll keep it.

By Mitch101 on 1/26/2012 10:15:22 AM , Rating: 2
As someone who remembers when a DVD rental was $6.00 and got charged $1.00 because I didnt rewind my video tapes and to rehash my old joke of Blockbuster charging me for not rewinding my DVD's. I'll pay for instant streaming of video content from Netflix too. It may not have everything but personally its a better deal than a movie channel like HBO and I do find value in the off content documentaries I wouldn't consider paying to rent. To fill in the gaps there is red box after all my car needs gas sometimes.

By Rukkian on 1/26/2012 11:13:05 AM , Rating: 2
I was in the same boat, I actually put my netflix account on hold to check out BB, since it seemed a better deal ($10 gets you unlimited 1 disk at a time, streaming, Bluray, and extra dish channels), but will be going back as there just is not another service out there that offers what netflix does.

By Reclaimer77 on 1/26/2012 2:48:45 PM , Rating: 1
Amazon needs to get their shit together, seriously. I was at a friends house the other night, we are both Prime members (mine is temporary from registering a Kindle Fire) and wanted to watch something. No problem, right? He fires up his PlayStation 3...OOOPS! There's a Netflix app, a Hulu App, even a freaking Vudo app. But no Prime app!

So we go downstairs and fire up the BluRay player with wifi and dozens of Internet apps. Guess what? No goddamn Prime app!

How does anyone, anywhere, get to actually USE this stupid service except through a PC or Kindle Fire??

Keeping my DVDs
By LBID on 1/26/2012 2:35:04 PM , Rating: 2
Netflix keeps trying to shovel dirt on DVDs, but that's the only reason I keep them. Their streaming selection is not that good, but even with the price increase their deal on DVDs can't be beat. I'm content to do without streaming until such time as they significantly improve their library.

I would guess that DVD usage amongst their customer base remains robust for the foreseeable future.

RE: Keeping my DVDs
By Vidmo on 1/26/2012 5:36:44 PM , Rating: 2
This. Only for me it's blu-ray. Where else are you going to find that kind of blu-ray selection?

Netflix streaming is ok for kids shows, old movies and the like, but it does not have multichannel audio and even the "HD" content is no-where close to the quality you get from a blu-ray.

Keep the blu-rays coming in the mail Netflix.

RE: Keeping my DVDs
By titanmiller on 1/26/2012 6:20:05 PM , Rating: 3
I've actually been really impressed with the HD quality of some streaming movies. There was one movie in particular that really looked almost blu-ray quality to my eyes.

By Trisped on 1/26/2012 4:46:49 PM , Rating: 2
A few other unfavorable instances occurred as well, such as the loss of Starz content (come February) when it refused to renew its distribution deal with Netflix, and the limitation of one stream per subscriber.

As was posted on the bottom of the linked article (in the update section), people who could not stream more then one video at a time were experiencing a "system glitch" which has since been resolved.

"No Netflix member is limited to less than two concurrent streams," Netflix spokesman Steve Swasey sent in an email. "A few Netflix members have heard differently from us, which is an error that we are correcting."

I think one of the biggest problems Netflix will need to over come this year is not only people's perceptions, but also mass media's lack of attention to the details. Netflix is giving away the benefit of having 2 subscriptions for the price of one (with some limitations), but perspective customers don't know because their favorite new site told them it was a bad deal, months after the issues had been cleared up.

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