S&P 500 index welcomes Netflix, boots the New York Times

Out with the old, in with the new.

Netflix, a subscription service for mail-order and streaming movies, has joined some of the largest and most prominent companies in the world on the Standard & Poor’s 500 stock market index, kicking out the New York Times in the process.

It’s a pretty big milestone for the company, which has been considered a mid-cap stock (meaning it isn’t all that big) since it went public back in 2002. The company is now worth $10.2 billion, compared to the New York Times’ paltry $1.4 billion.

Netflix has seen some pretty explosive growth in recent years as it shifted toward streaming content online. Like its competitor Hulu, Netflix streams movies and TV shows for a monthly fee on its site. But the company is paying out enormous sums of cash to get access to the best content as quickly as possible. Netflix paid out $115 million this quarter, which was more than 10 times greater than the $10 million it paid in the same quarter last year.

The results are pretty stellar. The company’s quarterly profit jumped by about 27 percent year-over-year last quarter. Netflix’s net income jumped to about $38 million this quarter, compared to $30 million in the same quarter last year, after adding another million subscribers in the last quarter. That brings Netflix’s total subscribers to somewhere between 19 million and 19.7 million, according to its most recent earnings report.

It’s also a pretty telling sign of the direction of media, as well. The New York Times is still seen as a champion of old media, with one of the largest newspaper subscription circulations in the country. But advertising revenue has dried up for old media companies since advertisers have flocked to cheaper and more pervasive online media sources. The New York Times’ stock price has been on a steady decline for the past three years as well, falling from around $26 to $9.39 today. Office Depot and Kodak were also booted to mid-cap status as part of the announcement.

But oftentimes companies are promoted to large-cap status due to run-ups in stock value rather than personal success. It makes sense, seeing as Netflix’s shares are up a mind-blowing 241 percent from a year ago (they were up 1.3 percent today) when they were worth $56.74. It means there’s either a tremendous vote of confidence for the company, or the stock is highly overvalued. Given the state of the stock market today, it wouldn’t be surprising to see the company’s shares take a nose dive as traders cut a nice profit from the recent run-up.