Netflix Subscriber Base Grows 84% on TV Ads

Online DVD rental company Netflix Inc. said Thursday that its subscriber base jumped 84% in the first quarter from a year earlier, helped by a television advertising campaign.

The company’s shares rose as much as 6.1% in early trading before losing much of the gains.

Los Gatos, Calif.-based Netflix, which charges subscribers $19.95 a month for its DVD rental service, said it ended the quarter with about 1,932,000 subscribers. That was up 30% from 1,487,000 at the end of the fourth quarter and up from 1,052,000 a year earlier.

“It’s a big number,” said stock analyst Dennis McAlpine of McAlpine Associates. “The key thing is they started in the fourth quarter some national TV advertising.... Obviously that’s working for them.”

Netflix also cited online acquisition as well as low turnover for the increase in subscribers.

Of the total subscribers at the end of the quarter, 95%, or 1,842,000, were paying subscribers. The other 5%, or 90,000 subscribers, were trial subscribers, Netflix said.

Netflix is spending more on ads as Wal-Mart Stores Inc., the world’s largest retailer, and Blockbuster Inc., the biggest video store chain, start competing services that charge monthly subscriptions for DVD rentals.

Shares of Netflix on Thursday rose $1.24 to $35.36 on Nasdaq after touching as high as $36.21 at the open.