Netflix to hike fees for new subscribers
22 Apr 2014
During its first quarter earnings call yesterday, Netflix revealed it planned to hike monthly subscription fee by "$1 to $2" for new customers, to acquire additional television shows and films.
According to Netflix, the price hike would come into effect later this quarter, and would only be applicable to selected countries.
The company revealed it planned to hike monthly subscription fee by "$1 to $2" for new customers and acquire additional television shows and films. According to Netflix, the price hike would come into effect later this quarter, and would only be applicable in some countries.
The Inquirer quoted Netflix CEO Reed Hastings as saying the company would be able to license much more content and deliver it in very high quality video.
This impending price hike comes even as profits rise and financial results exceed analyst expectations. The revenues for the firm stood at $1.27 billion for the three months ending in March.
According to Netflix its US customer numbers were up 2.25 million, taking its total number of US subscribers to 35.7 million.
The company's customer base in international markets reached 12.7 million, rising 1.8 million during the quarter.
According to the company improved content and original smash hits including House of Cards were responsible for an increase of 72 per cent in members on the same time last year, as the global subscribers reached 48 million.
Meanwhile fees are set to rise across all the 41 countries where Netflix operates, while existing customers would see their current prices unchanged for one to two years.
In a letter to shareholders, CEO Reed Hastings and CFO David Wells said, "We compete for original series with many linear TV networks (CBS, FX, HBO, BBC, etc.) and several Internet firms (Amazon, Hulu, Microsoft, AOL, Yahoo, etc.). Our advantages against other Internet firms are our scale in video and our focus.
"Our advantages against linear TV networks are internet on-demand consumption and targeted show marketing. The huge competition amongst all of us for great writers and producers means there's never been a more robust market for quality serialised television."
"We are approaching 50 million global members, but that is far short of HBO's 130 million. We are eager to close the gap."
Netflix further said it opposed Comcast Corp's proposed purchase of Time Warner Cable Inc.
"Comcast is already dominant enough to be able to capture unprecedented fees from transit providers and services such as Netflix," the company said in the letter. "The combined company would possess even more anti-competitive leverage to charge arbitrary interconnection tolls for access to their customers.''
