Netflix Inc., the world's largest online-video subscription service, today released its record-breaking June monthly subscriber viewing total.

The Los Gatos, Calif.-based company's stock rallied on news that Netflix's 23 million streaming-service customers, in June, watched more than 1 billion hours of movies and television shows on the Internet.

Provided the Netflix number is accurate, U.S. subscribers watched roughly 80 minutes of Netflix streaming video last month.  And if that's the case, in households with a Netflix subscription, the service would likely be the most popular cable network were it one, and likely top many traditional broadcasters' viewership numbers, BTIG Research analyst Richard Greenfield said.

Hastings takes to Facebook

Announcing  the milestone June number in a Facebook post, Netflix co-founder and CEO Reed Hastings congratulated the company's content-licensing team and Chief Content Officer Ted Sarandos, who leads the company's emerging original-programming endeavor.

On favorable company news, shares of Netflix on Tuesday rose by 6.2 percent, to $72.04, at the close of the day's abbreviated trading session. Tuesday's close-price marked the stock's biggest gain since May 23.

Tuesday's announcement from Netflix marked the first time the company has released viewing totals from this year. Its previous release was data for the fourth quarter of 2011, in which online viewing for the three-month period topped 2 billion hours.

Competitive push-back

Netflix last year began producing original content to bolster the company's content offerings amid growing competition in the content-streaming space, particularly from over-the-top (OTT) subscription service Hulu, HBO Go, and Microsoft's (Nasdaq: MSFT) Xbox.

Hastings, in his Facebook announcement, voiced confidence that the company's original productions will yield big returns for the company. "When House of Cards and Arrested Development debut, we'll blow these records away," Hastings wrote.

Citigroup bullish on Netflix

The Netflix announcement came on the heels of a favorable investor note issued Monday by a highly-regarded Internet-sector analyst at Citigroup.   

Mark Mahaney, managing director at Citi Investment Research & Analysis (CIRA), repeated his buy-rating and $130 price target for Netflix, saying Monday that the share price is "highly reasonable," Bloomberg reported.

Just hours before Hastings' announcement, a Morningstar analyst derided Netflix's general business strategy, in an article titled "Netflix Still Not Getting It Right."

'Flawed' business strategy

"[W]e believe Netflix's business model is flawed as most of the economic rents flow through to the content owners, and we see the international business acting as a drag on earnings and cash flow," Morningstar equity analyst Michael Corty wrote. "Bottom line, we think Netflix has a lot of issues."

Corty's analysis took particular aim at Netflix's plans for an aggressive international expansion aimed at capturing similar success to what the company has enjoyed in the United States and Canada. He said a global move by Netflix would likely result in years of operating losses and tepid profits.

"This strategy is the worst decision the company has made," Corty wrote. "Capital spent overseas, especially in Latin America, is a waste and depletes Netflix of the dry powder it will need to defend market share from competitors to its domestic service."

Investors will get an updated look at Netflix's financials July 24, when the company releases its second-quarter 2012 earnings. In a joint letter to investors, Hastings and Chief Financial Officer David Wells said in April they expected Q2 results to range from a loss of $6 million to a profit of $8 million.

For Q1, Netflix reported a loss of $4.6 million, or 8 cents a share. Meanwhile, year-over-year revenue increased 21 percent, up from $718.6 million in Q1 2011, to $869.8 million.

Financial doldrums

For months, Wall Street analysts have said Netflix faces mounting financial pressures. Investment-research provider Valuentum Securities warned recently that increasing costs for content-licensing and growing competition threatens Netflix profitability.

Valuentum's June 11 recommendation to investors: "We'd stay away from Netflix because the rising costs of content, and fierce competition from Apple could really impair profitable growth."

Its analysis read: "Ultimately, for a company struggling to remain profitable, we are unsure whether Netflix will be able to beat out some of its deep-pocketed competitors."

Meanwhile, Zacks Investment Research has assigned Netflix a "neutral" rating over the long term.

"[W]e believe that increasing costs related to licensing and renewal fees and higher capital expenditure due to international expansions can hurt growth in the near term," Zacks Equity Research wrote June 29. Analysts noted that the firm has given Netflix a Zacks #3 Ranking, which translates to a hold recommendation, in the short term.

Consumer trends improve

Citigroup's Mahaney, in his note to investors, referenced consumer survey results indicating improvement in Netflix's consumer trends. Customer satisfaction has stabilized, with 72 percent of customers moderately or very satisfied; and churn also appears to be improving, he said.

Not as welcome news was that Q2 domestic traffic to the Netflix website fell 7 percent from the year-earlier period, Mahaney said, citing comScore data.