While announcing better than expected quarterly stock gains Monday, Netflix said higher prices are coming to the online streaming service.
In its first quarter earnings report, Netflix announced Monday that new customers could see a $1 or $2 price hike in the next few months after a recent test price increase in Ireland caused little stir. But don't worry, current subscribers would pay current prices for a “generous time period.”
The company posted gains of 86 cents per share, surpassing estimates of an 83-cent gain. Netflix’s revenue stayed on track with projections at $1.27 billion for the quarter.
In a letter to shareholders, CEO Reed Hastings credited the bump to international success and the much-hyped season two of the site’s "House of Cards" series. According to a February report by data company Procera, eight times as many people tuned in to season two’s premiere date than for season one.
Hastings added that the show “attracted a huge audience that would make any cable or broadcast network happy.” And Forbes writes “Netflix needs exclusive shows like House Of Cards to continue adding subscribers and retaining them.”
Netflix also took aim at HBO, citing a Morgan Stanley poll showing 17 percent of people naming Netflix’s original programming the best, second only to HBO.
And it’s clear Netflix will have to up their content to emulate the broadcast giant. With mega-hit "Game of Thrones" and surprise hit "True Detective" getting rave reviews, HBO could be set for awhile.
But Hastings and Netflix CFO David Wells sound ready, if not excited, for the challenge. Just before ending their letter to shareholders, they added “We are approaching 50 million global members, but that is far short of HBO’s 130 million. We are eager to close the gap.”