I love rooting for Netflix. One reason is that in five years of being a customer, I've never had a bad experience. But the bigger reason is that Netflix has doggedly pursued its business model to become a worthy rival to BOB, also known as Big Old Blockbuster. After losing ground to BOB this year, Netflix has regained its momentum.
The company surprised analysts last night with
stronger-than-expected quarterly results and a 24% increase in subscribers, to 7 million. Its shares are up more than 9% today to above $25 as investors applaud the news.
Netflix's outlook seemed bleak three months ago, when the company missed revenue targets and had its first drop in subscriber numbers. BOB, meanwhile, said its online subscribers rose by 600,000 to 3.6 million. Netflix's share price dropped below the $16 mark in July in response.
Netflix has cut some subscription plans by $1 and reduced marketing costs to save money. A bit of a risky strategy, but one that seems to be paying off. Still, Netflix's position has always been volatile, and in the future the company faces increased competition from Amazon and others.
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