Go home, Chicken Little! The sky really isn't falling on Netflix (Nasdaq: NFLX).

The pioneer of DVD-by-mail rentals just updated its near-term guidance with slightly higher revenue, juicier EPS, and more subscribers than it expected when reporting earnings all of four weeks ago. The new figures account for the anti-dilutive effects of the $100 million share buyback program, and also the top-line boost from roughly 500,000 extra subscribers.

There is no explanation for the unexpected jump in subscriber counts, but chances are that Netflix is sucking mail-rental subscribers out of Blockbuster's (NYSE: BBI) grasp. My esteemed colleague Rick Munarriz worried that Blockbuster might report lower subscriber figures next week and that a shrink of 451,000 customers or more would indicate a dwindling total market. Well, make that about 900,000 now. Netflix can account for the rest.

To be fair, it's a tricky sector to forecast. You have to make sure that you're defining the market with appropriate boundaries. Blockbuster CEO Jim Keyes likes to make a distinction between "online video" and "DVDs by mail," rather than lumping both together under "online rentals." If you swing the other, more inclusive, way, you could argue that every video rental through Apple (Nasdaq: AAPL) iTunes or Amazon (Nasdaq: AMZN) Unbox should be included in the "online rentals" market size, though it's hard to draw a parallel between one-off rentals and paid subscriptions. Heck, some people might even include Google's YouTube videos. They're free and short, but still compete for the same eyeball minutes.

Whether the gains are coming from Netflix's unlimited online viewing, a sudden explosion in Sony (NYSE: SNE) Blu-Ray rentals, or some other source remains to be seen. What's certain is that Netflix is doing well and can be trusted to deliver growth even in difficult economic times. I, for one, am a happy shareholder.

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Fool contributor Anders Bylund owns shares in Netflix and Google, but holds no other position in any of the companies discussed here. You can check out Anders' holdings if you like. Foolish disclosure brings you the best bang for your online buck, every time.