After historic decline, Netflix user base surges

Posted by Mark Raby

Not that long ago, headlines were full of comments about Netflix's first ever loss in subscription numbers, but the company is on a rebound now.

The video rental and streaming giant reported that 610,000 new customers signed up to its service in the fourth quarter of 2011, making the total user base now 24.4 million.

This is a huge improvement over the third quarter, when Netflix embarrassingly announced it had lost 800,000 customers. It was a huge slap in the face to Netflix and to the "too big to fail" mentality in general.

Netflix, perhaps wrapped up in its own arrogance, proposed sweeping changes to its service including big subscription fee hikes and splitting its DVD-by-mail service.

After customer outrage, the company decided to keep its streaming video and DVD rental products bundled together but it still increased subscription rates.

Since then, however, it has managed to emerge stronger, and has significantly improved its presence on mobile devices. The Netflix app is now available on almost every current-generation Android phone and tablet, in addition to coming pre-loaded on some Windows Phones.

Granted, gaining back 600,000 customers after losing 800,000 is not amazing. It's still behind where it was a half year ago, but it is gaining its momentum back, and the company has strong hopes for the future.

Other competitors, including Amazon's instant video service and Hulu's growing catalog of back titles, pose a bigger threat than they did before, but Netflix's reach is still far ahead of anyone else.