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Netflix, riding success of 'House of Cards,' welcomes 2 million new users

Netflix logged $1 billion in revenue in the first fiscal quarter of this year. 

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Reuters
It was a huge Q1 of 2013 for Netflix.
  • By Matthew Shaer

Netflix attracted 2 million new members in the first fiscal quarter of this year, giving the California company approximately 29.17 million users in all – good enough to beat out premium cable giant HBO, which had 28.7 subscribers, as of last count. Meanwhile, quarterly revenue surpassed $1 billion, Netflix reported. News of the gains cheered investors and sent shares of Netflix spiraling past the $200 mark in pre-market trading Tuesday morning. 

"We’ve seen improvements in our business over the last year in content, in our product, in optimizing the way we process payments, and in the general recovery of our brand," Netflix brass wrote in a letter (PDF) to investors. "All of these improvements contribute to higher member satisfaction, which we see in higher year-over-year levels for members’ likelihood to recommend our service." 

The aforementioned "recovery," of course, is a nod to the disastrous Qwikster experiment of 2011, where Netflix announced it would spin off its DVD-by-mail service, drawing howls from consumers and investors; Netflix promptly reversed itself, and yanked the Qwikster brand.

Plenty of subscribers left Netflix anyway, and the debacle was later branded "the worst business decision since New Coke." 

So yes, Netflix's Q1 was by comparison very successful. But what's behind those big numbers? Well, the original content, for one thing – the show House of Cards, starring Kevin Spacey, was a smash hit, with millions of viewers streaming episodes from markets all over the globe. Netflix has also released a second series called Hemlock Grove; in May, the platform will air a new season of the cult-favorite Arrested Development. 

Over at the Atlantic Wire, Derek Thompson argues that all the original content buys "allegiance" from consumers, who have indicated in surveys that the shows make it less likely for them to cancel their membership. Of course, Mr. Thompson adds, there's another winner in all of this: you. 

"If you like expensive, high-quality TV, you should root for Netflix and Amazon and Hulu and HBO to go after each other for exclusive rights for content," he writes. "It means more wholesale demand for great television. It means better incentives for Hollywood's stars to become executive producers and showrunners. It means more great television." 

For more tech news, follow us on Twitter @venturenaut.

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