Netflix Shares Reach Record High in Midst of Outage

By Cindy Waxer October 22, 2010

Netflix’s shares may be soaring but its website could use a little tune-up. Just hours after announcing that it added 1.9 million subscribers during its third-quarter, 200,000 more than it had anticipated three months ago, the media company’s website experienced an outage with many subscribers unable to access the online video service. According to CNET, some customers were presented with an error message reading, "The Netflix website and the ability to instantly watch movies are both temporarily unavailable." 

The occasional outage, however, isn’t expected to impact Netflix’s staggering growth. The company now has nearly 17 million subscribers who use its service to rent TV shows and movies. In fact, Netflix recorded a 31 percent increase in revenue and watched as its shares jumped 11 percent after several analysts raised price targets on the stock.

The shares rose as high as $174.94, exceeding their previous 52-week peak, before later settling back to $170.84 in midday trading, which was still up $17.69 for the session. The stock has more than tripled in price this year.

Netflix’s plans for world domination have already begun. In late September, the company announced that, starting immediately, Canadians will be able to stream an unlimited number of movies and television shows from Netflix’s library, for a flat fee of $7.99 a month.

Unfortunately, the milestone was commemorated with a street celebration gone awry after reporters discovered that actors hired by Netflix had been instructed to hype the arrival of the company’s video streaming service. In fact, according to the Financial Post’s website, it was during a scheduled press event in Toronto that reporters from Canadian media apparently noticed that some of the responses from people in attendance sounded like “canned responses.” The actors also were urged to fill a variety of stereotypical roles, including “mothers, film buffs, tech geeks, couch potatoes,” according to the one-page handout given to them.

Not that Netflix has to worry about the odd outage or marketing snafu. The video-streaming service in Canada is already on track to become profitable in 2011.

Edited by Tammy Wolf

TechZone360 Contributing Editor

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