Netflix hits 10 million subscribers

DVD sales may be falling through the floor, but DVD rentals look like they're actually headed in the opposite direction. Online DVD rental outfit Netflix announced this week that it had surpassed the 10 million subscriber milestone, adding a whopping 600,000 new customers since January 1 alone.

The company added that it could hit 11.3 million subscribers by the end of the year.

Netflix CEO Reed Hastings called the event a "symbolic but meaningful achievement for our company," but it's also a sign that not all is grim in the world of business. Look at some of the company's other accolades: Netflix's push into video streaming has seen more than a million Xbox 360 users sign up for the service already (it launched only in November), and 700,000 customers are paying a buck extra per month in order to rent Blu-ray discs.

Wall Street is applauding the results, too: The stock has more than doubled since late October and continues to crawl upward, defying dismal market conditions.

Netflix will face perhaps its biggest test, however, if and when it it launches a streaming-only plan in the next year or so. Netflix, which has so far positioned its streaming service as a freebie for paying customers, might have trouble getting people to pay much for access to the relatively limited selection of movies it has on tap for instant viewing and forgoing access to the entire DVD library. But even if the company can collect a small amount of money -- say, 5 bucks each -- for its streaming service, that would likely be enough to make the effort profitable: It's been said that customers who rent more than six DVDs a month from Netflix are unprofitable due to the high (and ever-increasing) cost of postage, made worse for the company since discs have to be mailed both ways.

And yet, somehow, the company is making it work in a down economy. Congrats on the 10 million milestone.