NETFLIX PROFITS SOAR, STOCK SINKS

It’s not often that a company sees its stock falling more than 10 percent after reporting a blowout quarter with revenue up 27 percent from the comparable period a year ago. But that’s what has happened in the case of online video renter Netflix, which reported $520 million in revenue for the last quarter and a huge rise in the number of its subscribers. Still, it was less than what analysts had expected, and some predicted that the company’s emphasis on free streaming video was encouraging subscribers to opt for the company’s lowest $9.00-per-month subscription plan. (In its SEC filing, the company said that 61 percent of its subscribers watched a video online, up from 37percent a year ago. In a statement accompanying the filing, Netflix CEO Reed Hastings said that the company plans to spend more money on securing the rights to new movies than on promotional and marketing campaigns to sign up new customers. Speaking with reporters and analysts in a conference call later, Hastings said that he now regards kiosk operator Redbox as the company’s only serious competition. He dismissed online streaming sites like Hulu as being “too small to matter.”