Netflix stock rises as postal pricing to stay same

Netflix stock rises as postal commission says will maintain pricing co. pays for now

Associated Press

NEW YORK (AP) -- Netflix's stock rose nearly 3 percent Friday as the Postal Regulatory Commission said that for now it will maintain the price that the company pays to mail its DVDs to customers.

THE SPARK: DVDs sent by Netflix Inc. don't go through the automated sorting process and the company doesn't pay extra to the U.S. Postal Service for hand-sorting. In contrast, Gamefly must pay extra to mail its rental video game DVDs because they can be damaged by the first-class mail automatic mail sorting systems. Gamefly sued over the differing treatment between the two companies.

The Postal Regulatory Commission agreed that the practice was wrong, but came up with a scheme to make it cheaper for Gamefly but still force it to pay more than Netflix. The U.S. Court of Appeals for the District of Columbia Circuit overturned the commission and sent the case back.

THE BIG PICTURE: On Monday Netflix announced that its Internet streaming library will be adding the old episodes of at least eight more television series. Under a licensing deal, Netflix will be able to show previous seasons of TV series produced by Warner Bros.

The addition of the Warner Bros. show marks another step in Netflix's effort to ensure its streaming service has a wide variety of entertainment to appeal to the divergent tastes of its roughly 30 million worldwide subscribers amid more competition from Amazon.com Inc., Coinstar Inc.'s Redbox and other companies expanding into Internet video.

In an even bigger coup last month, Netflix landed the U.S. rights to show movies made by Walt Disney Co. shortly after they leave the theater.

Although the Disney movies won't be available on Netflix's streaming service until the autumn of 2016, investors interpreted as a sign that the company will be able to secure compelling content to retain existing customers and attract new subscribers.

SHARE ACTION: Shares of Netflix increased $2.82, or 2.9 percent, to $100.82 in afternoon trading. The stock has traded in a 52-week range of $52.81 to $133.43. Monday was the first time the shares had surpassed $100 in more than eight months. It had last topped $100 in late April.

The stock still remains well below its peak of nearly $305 reached in July 2011. That was around the same time Netflix infuriated many customers by rolling out a pricing change that raised rates by as much as 60 percent for U.S. subscribers that wanted to rent DVDs through the mail, as well as subscribe to the streaming service.

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