Netflix posts Q2 results, expects DVD business to stick around longer

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Netflix released its second quarter financial results today and things are looking up. Netflix added 1.8 million subscribers in Q2 compared to 1.03 million subscribers one year ago. Its total subscribers in the United States is nearly 25 million compared to 15 million a year prior. Revenue is up to $789 million globally. For the most part, Netflix’s numbers are up across the board.

Despite the growth, Netflix believes its DVD business has “likely peaked.” Netflix obviously won’t be getting rid of the service since it just introduced the $7.99 monthly DVD plan not too long ago. Netflix also mentioned that the number of customers who are subscribed to both a streaming and DVD plan decreased from Q1 2011. Netflix is using the money it’s saving from its DVD operations to bring more content to streaming subscribers. Netflix will spend more money on streaming content moving forward.

DVDs aren’t going away any time soon. Netflix intends “to keep DVD as healthy as possible for as many years as possible.” Netflix says it has “no intention of selling” its DVD business unit.

Netflix took a lot of heat from customers when it announced it was splitting its DVD and streaming subscriptions into two $7.99 a month offerings. Netflix expects some customers to abandon the DVD streaming plan or cancel Netflix completely. However, it also expects most of its customers to stick around for the $7.99 streaming plan. Netflix revenues and new U.S. subscribers are expected to be lower in Q3 thanks to the price hike.

Via [Netflix Letter to Shareholders]

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