Netflix Surges Most in a Year on Jump in Online Viewing
Netflix Inc. (NFLX), owner of the streaming and DVD-by-mail service, jumped the most in almost a year after reporting online viewing that surpassed an analyst’s estimate.
Netflix, based in Los Gatos, California, gained 11 percent to $80.45 at the close in New York, the biggest gain (SPX) among S&P 500 members. The shares rose the most since a 15 percent advance on Jan. 27, 2011.
Users of the company’s online movie and TV-streaming service watched more than 2 billion hours of content in the last three months of 2011, Netflix said today in a statement.
The number exceeded the 1.2 billion-hour estimate of Rich Greenfield, an analyst with BTIG LLC in New York. Netflix Chief Executive Officer Reed Hastings in December said fourth-quarter streaming hours would be “well over” 1 billion.
“It now appears our interpretation was far too conservative,” Greenfield wrote in a blog post.
Netflix would be the 15th most-watched U.S. TV network when compared to traditional cable and broadcast channels, Greenfield estimates. The company has more than 20 million streaming members globally.
At $7.99 a month, Netflix’s online service is eating into traditional television viewing, Greenfield said.
Hastings, 51, said on Dec. 6 that Netflix sees no quick return to profitability after alienating customers with changes in pricing and subscription terms. The company forecasts losses for 2012 because of costs to start service in the U.K. and Ireland.
The company is adding to its streaming library to keep users and restart growth, including current movies such as “Hugo” and “Margin Call,” and is commissioning exclusive content that competes with premium cable channels like Time Warner Inc.’s HBO.
“Lilyhammer,” starring guitarist and actor Steven Van Zandt of “The Sopranos” and Bruce Springsteen’s E Street Band as a New York gangster in Norway, premieres on Netflix in the U.S., Canada and Latin America on Feb. 6. “House of Cards,” another original series, also makes its debut this year.
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