Wednesday, March 02, 2005

Netflix braced to forgo profit for up to 5 years if needed

"SAN FRANCISCO (Reuters) - Online DVD rental leader Netflix Inc. is prepared to sacrifice profits for as long as five years in order to win up to 20 million U.S. subscribers and fend off major rivals such as Blockbuster and, its CEO said on Wednesday.

Chief Executive Reed Hastings said Netflix, the pioneer of online DVD rental, could capture as much as 20 percent of the U.S. market by extending the strategy it embarked on in October to run at breakeven while spending heavily on marketing.

'Correct,' Hastings said when asked if he was prepared to sacrifice profitability for as much as five years in order to reach 20 million customers, up from 2.6 million currently. 'That's true. We haven't given any guidance on it so therefore it's possible,' he said.

Hastings was speaking to a roomful of reporters at the Reuters Technology Summit in San Francisco."

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