Netflix doubles online spending
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FEB. 26 | Netflix doubled its online advertising spending last month as it capitalized on higher prices from rival Blockbuster while trying to stave off other content delivery services, such as video downloading, according to one survey.
The largest U.S. movie-rental service via mail spent $49.5 million in online ads in January, up from $24.4 million a year earlier, Nielsen/NetRatings said in a statement. Netflix trailed only online comparison-shopping site NexTag and credit-report service Experian among U.S. online advertisers, the research firm said.
Netflix said last month that it boosted its subscriber base by 18% to 7.48 million last year as movie rental store leader Blockbuster raised prices on its Total Access program, which allowed customers to order films online and return them to stores.
Fourth-quarter revenue for Netflix increased 21% to $302.4 million, while marketing spending rose 5.2% to $51.7 million, the company said Jan. 23.
“We understood the value of Internet advertising long before a lot of mainstream products,” Netflix spokesman Steve Swasey said, adding that the company doesn’t disclose advertising spending. He would neither confirm nor deny Nielsen/NetRatings’ figures.
“We’re spending less to acquire subscribers than we did a year ago,” Swasey said.
Netflix also said last month that it will team with LG Electronics to develop a set-top box that will allow subscribers to download movies directly from the Internet to TVs.