Netflix Rises 5% After Report on Market Share: Los Angeles Mover

Netflix Inc. (NFLX), the online and DVD-by- mail movie service, rose 5 percent to its highest close since October after researcher NPD Group Inc. said the company continues to dominate the film-streaming business.

Netflix, based in Los Gatos, California, rose to $103.46 at 4 p.m. New York time, the highest close for the stock since it finished at $118.84 on Oct. 24.

NPD, based in Port Washington, New York, said in a statement Netflix held a 55 percent share of the paid digital movie rental business, down from a peak of 59 percent at midyear. Netflix angered customers over a July price increase and changes to its mail-order and streaming services, including the aborted bid to rebrand the mail-order unit Qwikster.

“The movie-rental market is clearly undergoing a sea change, as consumers become better equipped to access on-demand and streamed movies and are more comfortable with available delivery options,” Russ Crupnick, an NPD senior vice president, said in the statement.

Coinstar Inc. (CSTR)’s Redbox dispensers emerged as the top disc rental category, with its share of DVD and Blu-ray rentals rising to 37 percent in 2011 from 25 percent the year before. Blockbuster’s share dropped 6 percentage points to 17 percent.

Netflix’s share of physical rentals was unchanged at 30 percent for the year, NPD said. That number tumbled to a two- year low of 25 percent in the fourth quarter, NPD said.

“There’s no doubt that Redbox has been the largest beneficiary of the collapsing brick-and-mortar store rental business, especially with ongoing Blockbuster store closings and the fact that there are also fewer independent stores than the prior year,” Crupnick said. “The Netflix share erosion may have resulted from their recent well publicized challenges with pricing, and from their now defunct Qwikster experiment.”

Coinstar, based in Bellevue, Washington, rose 1.2 percent to $47.26 at the close in New York.

To contact the reporter on this story: Rob Golum in Los Angeles at rgolum@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net

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