Netflix posts a first-quarter loss of $8.8 million

About this news article

Posted by	Dan Bell
Posted on	22/04/05 18:02
Number of views	314

Text Size Text Size

Netflix posts a first-quarter loss of $8.8 million

Ouch! This online rental war is getting serious. Netflix took a 17 cent per share loss after the news of the first quarter losses. Oddly, revenues are up tremendously over last year though, first-quarter revenue was $154.1 million, up from $100.4 million a year ago. So what's the problem? It's those darn guys in marketing again!

Netflix says it predicts even further losses, as long as they are in competition with Blockbuster. In addition, they fully expect Blockbuster to offer more price cuts in the second quarter and by golly, Netflix Chief Executive Reed Hastings says, they are going to match them.

The company forecast a fiscal-year net loss of $5 million to $15 million on revenue of $660 million to $685 million. The revenue estimate was lower than previously forecast.

Hastings gave no firm time when the company would move back to profitability from a plan announced late last year to run at break-even to stay ahead of new competitors.

"To the degree that Blockbuster is on a hyperaggressive $50 million path, that necessitates a response from us," Hastings told analysts. "Presumably at some point they are interested in profits also and that might trigger them backing off marketing and price (cuts)."

You can read the whole story over at ZD Net. Looks like this could be a long hot summer for the online movie rental business. We have to wonder what deals are coming our way from Blockbuster and Netflix as well!

Source: ZD Net

Next: Nero adds new feature to Nero Recode 2: PSP support

Previous: More companies join talks for unified Blu-ray format

Want to submit your own news? Click here

Posted by Hypnosis4U2NV on Friday 22 April 2005 18:37

The Post Office is loving this!

Posted by thcz on Friday 22 April 2005 19:22

cheaper always sounds good

Posted by CORRSA on Saturday 23 April 2005 00:24

hmm and they say that the market is losing money to piracy well if im reading right there's an awful lot of mney floating around in the rental purchase market of dvd more than enough to go round sodominance by the big boys is total greed ah well at least the librarys are still open im going back to the book for some enjoyment

Post your reaction!