Shares in online movie service
took it on the chin Thursday, thanks to uncertainty over its planned movie download service.
The Los Gatos, Calif., entertainment company saw its shares decline 9% by the end of Thursday trading. The slide came just a day after Netflix posted solid third-quarter earnings. News out of the third-quarter analyst call provoked the selloff when CEO Reed Hastings said the company would delay online downloads indefinitely thanks to pushback from Hollywood content providers.
The studios are looking for ways to best monetize movie product in an environment in which piracy remains an ongoing concern, box-office results have been soft, and DVD sales have been inconsistent. Netflix will continue to pursue download technology, but Netflix plans will wait until Hollywood comes around and coughs up the content.
While the company posted light top-line earnings, subscribers grew an impressive 61% to 3.5 million and are on target to surpass 4 million by year's end.
Late Thursday, Netflix was down $2.52 to $25.83.