(Image source: Forbes) 

BY MADISON MACK  
ANCHOR NATHAN BYRNE

After a rocky 2011, Netflix is winning back the hearts of customers and investors alike.  Fox Business reports.

“Shares of Netflix are popping after hours trading after the company reported better than expected 4th quarter results. Earnings beat estimates by 18 cents to 73 cents a share.”

Eight hundred thousand Neflix customers straight-up revolted back in September after the company announced plans to raise prices and split its DVD and streaming services. So how did stocks start to soar? The International Business Times explains – Neflix still managed to add subscribers.

“But added 600,010 net new subscribers in its home US market, helping revenue leap 47% to 876 million dollars.”

And what’s next? Netflix announced in October its intention to shift its focus from DVDs to streaming and original content. An analyst on CNBC says that Netflix will struggle in the future because streaming isn’t as profitable as DVD rentals.

“What the street’s really missing here is that the new streaming subscribers just aren’t that profitable and the subs that we’re now adding aren’t the same kind of subs we’ve had in the past. These guys are going to need 4-5 streaming subscribers for every DVD customer that leaves."

But on Bloomberg another analyst says after a series of giant missteps, Netflix is heading in the right direction.  

“The number one thing Netflix has to protect is their relationship with their customers …”
 

“The fact that they are growing at all, the fact they added subscribers at all, that’s a good thing. They made money, that’s a good thing.”

And a Harvard Business Review blogger points out, Netflix still has a lot of room to expand.

“Given that Netflix has 20MM paid streamers, it may still be in a category growth mode. In other words, Netflix has only tapped half of the existing market for viewers with demand for streaming content, and that market is presumably growing.”