Netflix revenues pass $1B, plans price rise for new customers

The video-streaming company decided to increase subscription rates for new members -- the last time they increased rates was four years ago.
By Ananth Baliga  |  April 22, 2014 at 7:53 AM
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LOS GATOS, Calif., April 22 (UPI) -- Netflix plans to charge new subscribers $1 to $2 more per month, on the back of increasing revenues and profits and a growing subscriber base.

For the quarter ended March 31, Netflix had a net revenue of $1.27 billion, up from $1.02 billion the year before. The company that popularized binge-watching said it earned $53 million, or 86 cents a share, as compared to 5 cents a share during the same period a year ago.

The company's decision to raise prices reflects the confidence that original shows like House of Cards and Orange is the New Black and other content will continue to attract new customers. Netflix said the increase in subscription prices will only be for new subscribers and existing customers can keep their current subscription price “for a generous time period.”

Subscribers currently enjoy unlimited video streaming for $7.99 a month in the U.S.

Netflix added 2.25 million U.S. subscribers for the quarter, growing its domestic base to 37.5 million members. International subscribers grew by 1.75 million members to 12.7 million.

Netflix CEO Reed Hastings was particularly happy with the success of House of Cards, especially the second season of the series, which came out in February.

"'House of Cards,' for which Season 2 debuted in February, attracted a huge audience that would make any cable or broadcast network happy," Hastings said in a statement. "The on-demand nature of Netflix means that as we promote Season 2, we can still see significant new enjoyment of Season 1."

Netflix has new seasons of Derek, starring Ricky Gervais, and Orange Is The New Black set to premiere this quarter.

The company does expect a slight dip in new subscribers when the FIFA World Cup starts June 12 in Brazil and siphons viewers away.

[Bloomberg Businessweek] [MarketWatch]

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