The subscriber base at Netflix Inc., which offers DVD rentals through Netflix.com, reached 1.29 million at the end of the third quarter, an increase of 13% over the prior quarter and 79% over the same period last year, the company reports. Paying customers accounted for 96% of all subscribers at the end of Q3, compared with 96% in the prior quarter and 95% a year ago.
In an effort to keep its customers satisfied and expand its subscriber base, Netflix is continuing its effort to offer next-day delivery service throughout most of the U.S This week it launched its 20th distribution center, in Cleveland, to expand next-day delivery service, and it expects to open more regional distribution centers by year-end. The company already offers next-day delivery to more than 70% of the U.S. population and by year-end expects to expand to more than 80%.
Netflix says it expects the expansion of next-day delivery service to help increase its penetration of households, following a trend in its original market area of San Francisco. Netflix has offered next-day delivery in the Bay Area for four years and now serves 5.4% of households there, compared to 1.2% in the rest of the U.S.
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