LOS GATOS, CA – Watching House Of Cards or Orange Is The New Black could cost more as early as this summer if Netflix follows through on a proposal to raise its monthly fee.
The streaming service said late Monday that it is planning to add $1 or $2 to its monthly price for new subscribers, depending on the country, but that existing customers would stay at current pricing “for a generous time period”. The additional funds “will enable us to acquire more content and deliver an even better streaming experience”, reads a note to shareholders that included the company’s first quarter financial results.
For the quarter ended March 31, 2014, revenues were $1.27 billion, up from $1.02 billion during the same quarter in 2013. Netflix also recorded net profits of $53.1 million, a marked increase over the $2.7 million reported for the same period a year earlier.
The company noted that revenue for international markets, which includes Canada, currently amounts to 25% of its total streaming revenue, and predicted that the international segment will achieve profitability this year and eventually surpass its U.S. market.
Streaming subscribers in the U.S. increased by 2.25 million this quarter to 35.7 million, up from 29.2 million in the first quarter of 2013. Netflix said it has 48.4 million total streaming subscribers, of which 12.7 million are international subscribers, and it anticipates more than 50% year-over-year growth in Q2 net additions “despite slight headwinds from the World Cup.” A breakdown of the number of Canadian Netflix subscribers was not specified in the results.
Now available in 41 countries, Netflix pledged to continue its international expansion and to invest in more original series.
“Original series represent a tremendous opportunity to raise awareness of, and build consumer enthusiasm for, the Netflix brand”, continues the note, signed by CEO Reed Hastings and CFO David Wells. “We’ll be investing more in marketing high-quality exclusive content, and spending less on direct response advertising such as banner ads touting free trials.
Internationally, we’ve been developing new brand marketing campaigns to strengthen our connection to local consumers. These campaigns are part of a global brand platform highlighting the many ways people find delight in the Netflix experience.”
