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Netflix CEO forecasts steady decline in DVD subscribers

Netflix will focus its energy on streaming video and unique content, Netflix CEO Reed Hastings said this week. 

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Netflix CEO Reed Hastings said yesterday that he expects DVD subscribers to decline in coming years. Here, a user accesses Netflix using an Xbox console.
  • By Matthew Shaer

Call it the long goodbye.

On Wednesday, Netflix CEO Reed Hastings said his company expected the number of Netflix DVD subscribers to "decline steadily for every quarter, forever," as more users turn to streaming video. Hastings, who was speaking to reporters during a conference call, hastened to add that Netflix would keep the DVD portion of its business "stable," and "very high functioning," at least for the foreseeable future. 

In the meantime, according to All Things D, Netflix will bulk up its selection of streaming video, and continue to add new unique online content, such as the forthcoming series "House of Cards." In other words, as Peter Kafka of All Things D notes, Netflix will become "a premium cable channel that gives subscribers lots of viewing choices – including some stuff they can’t see anywhere else – but not unlimited choices." 

There's certainly room for that kind of service, Kafka adds: "a maverick Internet video service that could upend all of Hollywood and the TV industry sounds pretty exciting." Netflix, of course, weathered its share of woes last year, including a major dust-up over rate hikes and the rushed introduction of a rental service called Qwikster. Considering Hastings' pessimism toward discs, it's no wonder that Netflix tried to break off from DVD rentals and push that leaky boat out to sea. Of course, its current customers hated that plan, so Netflix later cancelled it.

But this week, the company posted some good news: During the last quarter of 2011, Netflix signed up 610,00 new US customers, almost making up for the 800,000 lost after the summer price hike – and bringing the total Netflix membership to 24.4 million. That was enough to beat analyst expectations, and give a nice bump to Netflix stock, Bloomberg News and the Washington Post report today. 

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