Netflix to put its prices up - but just a little bit and not yet
Netflix is to increase subscription prices for new customers by one or two dollars a month within the next few months. Existing subscribers will be able to continue at their current rate "for a generous time period," the streaming video company said yesterday.
Reed Hastings: We're all in this together
U.S. streaming subscribers currently pay $7.99 a month, the price since 2010. The company raised monthly fees for new subscribers in Ireland by one euro back in January, a change that it said had "limited impact."
Netflix CEO Reed Hastings said in a conference call with analysts, "If we want to continue to expand, to do more great original content... we have to eventually increase prices a little bit."
The news came as part of Netflix's first-quarter earnings announcement. Shares surged 6.6% in after-hours trading Monday, after another quarter of strong subscription growth . Earnings were ahead of analyst expectations.
Netflix added 2.25 million new streaming subscribers in the first three months of the year. The service now has nearly 36 million subscribers in the U.S. and over 48 million globally.
Netflix has boomed with original programming, led by "House of Cards', the second season of which debuted in February. Season 2 of another Netflix series, "Orange Is The New Black," is coming June 6.
The online video business is becoming increasingly competitive, however, with streaming services like Hulu, HBO Go and Amazon's (AMZN, Fortune 500) Prime Instant Video. Questioned about this competition Monday, Hastings said that he was a Prime subscriber, and that he viewed it and similar services as "complementary to Netflix."
"We're building this ecosystem together that's about Internet video," Hastings said. "The more players there are in Internet video, the bigger that ecosystem gets.... and we're all participating in that transformation."