Netflix ( NFLX) is an online movie rental business that operates on the subscription model and offers its customers physical DVDs as well as online streaming. Netflix recently reported results for the second quarter of 2010. Key earnings nugget: Although Netflix's subscriber base increased sharply, DVD shipment growth slowed as more subscribers chose the streaming video option. We think this is good news for Netflix, because shipping fewer DVDs will save the company money that it can invest in marketing and content acquisition. We have updated our price estimate for Netflix's stock from $82.26 to $85.06. Our analysis follows below.