30 Million Reasons to Like Netflix

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As bad as the third quarter was for Netflix (Nasdaq: NFLX  ) in terms of its streaming subscriber count, at least we now have confirmation that it's been growing through October.

CEO Reed Hastings is thanking Netflix users on hitting the round milestone of 30 million streaming accounts this morning.

For those scoring at home, Netflix had 25.1 million streaming domestic members and another 4.3 million international users -- or 29.4 million streaming subs -- at the end of September. It has apparently kicked off October by signing up 600,000 more subscribers than those that have cancelled the service.

It's a welcome piece of good news after a poorly received report on Tuesday. The stock tumbled nearly 12% yesterday after revealing that domestic streaming accounts fell on the low end of its range for the third quarter and that it would fall short of its goal to nab 7 million net additions for all of 2012.

Hastings has once again taken to Facebook (Nasdaq: FB  ) to broadcast this news. It's merely a coincidence that he happens to be on its board of directors.

It was back in July that he revealed another meaty milestone -- Netflix now serving up more than a billion hours of video a month -- on the leading social networking website. A month after that he used Facebook to taunt Time Warner's (NYSE: TWX  ) HBO.

At least this time Hastings' status update on Facebook was accompanied by a formal press release that came out around the same time. Even though there weren't any selective disclosure issues raised during his last summertime revelation -- his Facebook status updates are accessible to the public -- there's nothing wrong with going through the formal channels. Even Netflix's blog, which hasn't been updated in weeks, would be a reasonable outlet.

The news is welcome all the same. In short, the company's streaming business continues to grow, even as its share price continues to shrink. Sooner or later, the market will reward Netflix's ability to entertain more and more customers with every passing quarter after a rare step back late last year.

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Longtime Fool contributor Rick Aristotle Munarriz owns shares of Netflix. The Motley Fool owns shares of Facebook and Netflix and has the following options: long JAN 2014 $20.00 calls on Facebook. Motley Fool newsletter services recommend Facebook, Netflix, and Time Warner. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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  • Report this Comment On October 26, 2012, at 1:04 AM, AceInMySleeve wrote:

    Technically 600k is slower than pace for midpoint guidance for Q4 (~750k), and a bit faster than avg Q3 pace. Neither of these are surprising. Q4 growth concentrates in the back half, and Nordic marketing spend should up the pace compared to Q3.

    I do think they lowballed their Q4 domestic estimates this time, projecting something like 13% increase in gross adds which is historically low.

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