Netflix plans to raise prices as subscribers growTuesday 22 April 2014 18.13
Video streaming service Netflix said it intends to raise the monthly subscription price for new customers by $1 or $2 a month to help it buy more movies and TV shows and improve service for its 48 million global subscribers.
Investors welcomed the news by Netflix, which had suffered from a consumer exodus and stock plunge after it announced a price increase in 2011.
Chief Executive Reed Hastings said Netflix had improved its selection of TV shows and movies and added original series like critically acclaimed thriller "House of Cards."
The company said it plans to impose "a one or two dollar increase, depending on the country, later this quarter for new members only." It did not name the countries. Existing customers would keep their current price "for a generous time period," it said.
The company said in its earnings report it added 2.25 million customers to its US streaming business during the quarter that ended in March, in line with the company's earlier guidance, for a total of 35.7 million.
In international markets - including Ireland - its customer base reached 12.7 million, a gain of 1.8 million during the quarter.
Net income for the quarter reached $53m, an increase from $3m a year earlier. Earnings-per-share came in at 86 cents, topping the average forecast of 83 cents.
During the quarter, it released the second season of critically acclaimed Kevin Spacey drama "House of Cards."
Netflix is investing in original series, such as "House of Cards" and "Orange is the New Black" to attract and keep subscribers. If faces competition from online video players like Amazon.com and Hulu, as well as on-demand content from cable operators.
Netflix also said it opposed Comcast Corp's proposed purchase of Time Warner Cable. In March, Netflix reluctantly agreed to pay "interconnection" fees to Comcast for faster delivery of its TV shows and movies.
"Comcast is already dominant enough to be able to capture unprecedented fees from transit providers and services such as Netflix," the company said in its letter. "The combined company would possess even more anti-competitive leverage to charge arbitrary interconnection tolls for access to their customers."