Netflix: Instant-Streaming Only Option May Debut In U.S. Later This Quarter

Netflix (NSDQ: NFLX) may begin to offer an instant-streaming only option in the U.S. as soon as later this quarter. The company debuted an instant-streaming only option in Canada last month, and CEO Reed Hastings says the success of that launch so far has driven the company to test the option in the U.S. “If our results are as strong as we think they will be, then we will look to start this offering later in this Q4. Pure streaming could become our core offering in the USA, and DVD would be offered as a supplement for an additional charge, like we offer Blu-ray today,” he says in his commentary on today’s earnings results.

Instant-streaming is already driving much of Netflix’s growth. The company disclosed it now has 16.9 million subscribers, up 52 percent from its total a year ago. Hastings says the majority of the company’s customers now spend more time watching content streamed by Netflix than delivered by DVD. Sixty-six of the company’s customers streamed a TV episode or movie for more than 15 minutes during the quarter, up from 61 percent last quarter.

The company has added significantly to the volume of content it has available for streaming over the last three months, through new deals with NBC Universal (NYSE: GE), Sony (NYSE: SNE), Nu Image/Millennium Films, and Epix, and the company says it will continue to invest “additional revenue back into growing our streaming content.”

For the quarter, Netflix said revenue jumped 31 percent to $553.2 million, while earnings per share increased to 70 cents, compared to 52 cents a year ago.

Those results were largely in line with analysts’ expectations. On average, analysts had expected the company to post revenue of $551 million and earnings per share of 72 cents. The company’s stock is up more than 7 percent in after-hours trading.