Netflix raises performance guidance for Q4

The market for online DVD rentals shows no sign of slowing down, as growth this quarter is continuing at a pace faster than expected at Netflix Inc.’s Netflix.com. But as Netflix’s revenue, net income and number of subscribers are increasing, so is the cost of acquiring new subscribers, the company said.

Netflix projects Q4 net income of $900,000 to $2.6 million, up from an earlier expectation of $200,000 to $2.3 million, on projected Q4 revenue of $80-$82 million, up from $77-$81 million.

It said Q4 subscriber acquisition cost is now expected to come in at $32.50-$33.50, up from an earlier projected cost range of $30-$33. But while acquisition costs are rising, subscribers are staying for longer periods. Netflix projected its Q4 average monthly churn of subscribers will improve to 4.7-5.0% from an earlier guidance of 4.9-5.4%.