July 18, 2003, 12:00 AM

Netflix reports first profit on 74% increase in Q2 revenue

With a 37% increase in subscribers to more than 1.1 million in Q2, online DVD rental store Netflix racked up its first quarterly net profit, $3.3 million, compared to a net loss of $13.1 million a year ago.

 

With a 37% increase in subscribers to more than 1.1 million in Q2 vs. a year ago, online DVD rental store Netflix Inc. racked up its first quarterly net profit, $3.3 million, compared to a net loss of $13.1 million a year ago. Total Q2 revenue grew 74% year-to-year to $63.2 million from $36.4 million.

Netflix said its Q2 subscriber acquisition costs dropped to $30.45, down from $34.13 in Q2 of last year. Its average monthly subscriber churn during the quarter dropped to 5.6% from 6.7% a year ago. Churn includes free trial subscribers as well as paying subscribers who choose not to renew during the reported period.

Netflix, which pioneered the online rental of DVDs, lets customers receive an unlimited number of DVDs, keeping up to three at any one time, at a monthly subscription fee of $19.95. It imposes no due dates, late fees or shipping charges. As customers send back a DVD in a pre-paid mailer, Netflix sends a new movie from a subscriber`s pre-selected list.

 

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