Netflix sales approach $1 billion for 2006

Sales last year at online DVD renter Netflix Inc. significantly outpaced the Internet retailing 25% industry average. In 2006 Netflix brought in $996.7 million, a 46% leap over $682.2 million in 2005. Sales jumped 44% to $277.2 million during the fourth quarter of 2006 compared with $193 million in Q4 2005.

The company attributes the sales growth to strong increase in its subscriber base and continued improvement in the customer experience. “2006 was a solid year for Netflix,” says Reed Hastings, Netflix co-founder and CEO, “demonstrating again the strength of our business model.”

Recently, Netflix, No. 21 in the Internet Retailer Top 500 Guide, announced an “instant watching” feature using real-time playback technology that enables subscribers to view a rental film on a PC screen. Though the new feature does not allow subscribers to download video, it is a step in that direction—the company is investing more than $40 million this year in what might evolve into a video on demand service, says Hastings, who will deliver the June 6 Keynote Address The Transformation of the Movie Rental Industry at the Internet Retailer Conference & Exhibition, June 4-7 in San Jose.

Meanwhile, the instant watching feature, which debuted with a fraction of Netflix’s 70,000-title catalog at 1,000 available titles, should be available as an alternative to DVD rental to all Netflix subscribers by June in a phased roll-out, according to the company. The new feature is included in subscribers’ monthly membership plans at no additional cost. However, the number of hours of access to films delivered electronically varies by the type of plan in which subscribers are enrolled.