Netflix gets down to reporting some real metrics after the close of trading today, when the Web's top video-rental service is scheduled to issue second quarter earnings.
CEO Reed Hastings caused a stir earlier this month by posting to his Facebook page a note about how Netflix subscribers watched more than 1 billion hours of video via the service. But some analysts have noted that it's difficult to know what that means for Netflix's overall business. A much better measure of the company's health is how many subscribers signed up during the quarter ended June 30.
They will also look for any signs of strain brought on by stiffer competition from Amazon and other rivals, Netflix's international expansion or the rising costs of acquiring movies and TV shows for the company's popular streaming service.
Prior to the third quarter last year, Netflix had added 1 million new domestic subscribers in each of seven consecutive quarters. That streak was broken last summer after CEO Reed Hastings alienated much of its base by raising prices and by attempting to spin off the company's DVD operations. Then during last year's third quarter, Netflix actually lost 810,000 subscribers.
Analysts are optimistic. Those polled by Thomson Reuters expect Netflix to report a profit of 5 cents a share on $888.9 million in revenue. In the year's first quarter, the company reported a loss of 8 cents a share. That was the first quarterly loss in eight years.
As for subscriber numbers, the company has said it expects between 200,000 and 800,000 new streaming customers for the quarter. In the two previous sequential quarters, Netflix added about 600,000 new subscribers.
Correction, 12:37 p.m. PT:This story incorrectly stated the guidance Netflix gave for additional subscribers. The company said it expects between 200,000 and 800,000 new streaming subscribers in the second quarter.