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Netflix: Streaming Video Attracts Customers, Lifts Profits

Movies-by-mail service Netflix says it added 718,000 subscribers in the fourth quarter -- far more than analysts had expected -- and attributes the surge to the popularity of its online video streaming service. "It's very clear that streaming is energizing our growth," says CEO Reed Hastings.

Subscribers can use Netflix's "Watch Instantly" service to stream any of about 12,000 television shows and movies without waiting for the DVD to arrive by mail. Hastings expresses confidence that Netflix can thrive, Dawn C. Chmielewski writes, even as online services such as Hulu rely on advertising to provide TV shows and movies free to viewers, and Amazon.com and Apple offer movie downloads for purchase or rental.

Nexflix now has nearly 9.4 million subscribers and expects the number to reach 10.6 million subscribers within the next three months. It plans to "substantially" increase its investment in streaming video in 2009, Hastings says.

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