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July 22, 2014

Netflix sees profit surge

Streaming service added 1.69m users over last 3 months despite price rises.

By Vinod

On-demand video provider Netflix has announced a large increase in profits as it sees the benefits of a major advertising and membership push.

The company announced profits of $71m (£42m) in the second quarter of 2014, more than double that of the same period a year ago.

Netflix said that revenues from its streaming content service rose nearly 50% to $1.2bn, compared to $837m a year earlier.

The service, which recently reported that its userbase had topped 50 million users across more than 40 countries, attracted 1.69m new users during the period from March to June.

This is despite the company raising the price of its monthly subscriptions in May as it reacted to high demand, with a month’s UK subscription now costing £6.99.

The company has also recently been embroiled in disagreements with several US ISPs, which it accuses of deliberately slowing down its service.

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According to recent statistics, Netflix accounts for 34.2% of all web traffic in the US during evening hours, (and is the second largest fixed traffic driver in the UK) but has had a very public spat with Verizon, with both sides accusing the other of misleading customers regarding the slow running of the service.

Shares in Netflix rose nearly 2% in trading after US stock markets had closed, continuing a rise throughout which has seen the company’s shares increase 22% this year.

 

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