Netflix got 27.15 million subscribers by the end of 2012. It is a blow to those who have doubted the company’s business acumen. The number of American homes that were subscribers to the streaming service firm was more than its own projections for the fourth quarter after it experienced underwhelming results in the previous quarters.
The company’s growth in streaming, which is up by 2.05 million subscribers in the United States from the third quarter, was its biggest in almost three years. It helped the company report net income of $7.9 million. The number surprised most analysts who predicted a loss for the company.
The results indicated how far Netflix has come since the troublesome period in mid-2011. That was when the company announced its new pricing plan for its services. Customers didn’t like the new pricing plan. This led to the drop of its stock price, from as high as $300 in 2011 to as low as $53 in 2012.
Investors welcomed the announcement made by Netflix. They sent the company’s shares up more than 35 percent in after-hours trading Wednesday. The stock ended regular trading at $103.26. The company’s fourth quarter success was a good reminder for the entertainment and technology industries that consumers want on-demand access to TV shows and movies. The streaming service market is saturated with companies such as Amazon, Hulu, and Redbox but Netflix remains the biggest company and considered the pioneer in the field.
There were questions on whether Netflix can attract enough subscribers to keep paying its rising bills to content providers that has amounted to billions of dollars in the years to come. The company said that it would take on more debt to finance more original programs. One of which is the political thriller House of Cards, that will premiere on the service on February 1.