Netflix More of Byte Player Now

Once viewed as a bit player on the dot-com scene, online DVD rental company Netflix is emerging as one of the Internet’s rising stars.

In just two years, the Los Gatos, Calif.-based company has attracted 300,000 subscribers who pay a $19.95 monthly fee to get as many as three DVD rentals mailed to them at a time, with no restrictions on how long the movies can be kept.

After watching the DVDs, subscribers return the rentals to Netflix in postage-paid envelopes, giving them the right to check out three more movies from Netflix’s library of 10,000 titles at no additional cost.

It looked like a ho-hum business when software entrepreneur Reed Hastings started Netflix in 1997, but the service is drawing rave reviews from consumers weary of standing in long lines at their local video store and incurring extra charges for late rental returns.

“We used to be criticized because we weren’t doing anything cool like streaming movies over the Internet,” said Hastings, the company’s chief executive. “We just wanted to create something practical.”

Netflix so far has relied chiefly on the word of mouth of happy subscribers for its growth.

The rental service hopes to raise its profile under a marketing alliance to be announced Tuesday with the electronics retailing giant Best Buy Co. The two companies will run a co-branded DVD rental service on their Web sites and refer business to each other.