Netflix, adding customers and profits, will raise prices

Discussion in 'Blazers OT Forum' started by BigGameDamian, Apr 22, 2014.

  1. BigGameDamian

    BigGameDamian Well-Known Member

    Joined:
    Oct 19, 2012
    Messages:
    29,599
    Likes Received:
    11,352
    Trophy Points:
    113
    http://www.usatoday.com/story/tech/2014/04/21/netflix-results/7965613/

    Bolstered by a burgeoning roster of paying customers and profits that exceeded expectations, Netflix says it plans to increase prices for new subscribers.

    The company on Monday announced that its subscriber base grew more than expected — adding 4 million — to 48 million members worldwide. Its net profit of $53 million, or 86 cents per share, beat analysts' estimates of 83 cents a share. It also beat the company's own forecast of $48 million and earnings per share of 78 cents.

    Some time in the next three months, the company plans to raise prices $1 or $2 for new members globally — a move that could also temper subscriber churn. That's because existing member monthly fees would remain at current pricing (such as $7.99 or $11.99 in the U.S., for two-stream or four-stream tier subscriptions) for a "generous time period," the company said. The lower fee could counteract the tendency for some users to cancel after binge-watching a season of House of Cards and sign up later for no penalty.

    Netflix, which currently has 35.7 million U.S. subscribers, continues its drive toward a domestic base of 60 million to 90 million.

    The company is acting from a position of strength, says Mark Mahaney, managing director of Internet for investment banking firm RBC Capital Markets. "Across the Internet, we're seeing companies like Amazon, Pandora and Netflix ... raising prices one way or another," he says. "I don't think too many consumers are going to be put off by spending a dollar or two a month for the quality, the quantity of content that Netflix has."

    Shares of Netflix rose in after-hours trading, up more than 6% to $369.50, having closed at $348.49 before the Los Gatos, Calif.-based company released its earnings at the market's close.

    Netflix stock has been volatile. It climbed to nearly $455 after the streaming service in February announced a deal with Comcast to ensure high-quality streaming of Netflix content for Comcast Net customers. Since then, the stock has taken a hit in the wake of last month's reports that Apple and Comcast were teaming up for an as-yet unannounced streaming TV service.

    Among Netflix's good first-quarter signs was an increased rate of growth in new U.S. streaming subscribers, an additional 2.3 million, compared with 2 million in the same quarter last year. Signs were bright for such initiatives as the DVD mail service and international business. Netflix's international base grew to by 1.75 million during the quarter to 12.7 million and accounted for about 25% of total revenue.

    In his letter to shareholders Monday, Netflix CEO Reed Hastings expressed his opposition to Comcast's proposal to buy Time Warner Cable, notwithstanding his own recent deal with Comcast. "Comcast is already dominant enough to be able to capture unprecedented fees from transit providers and services such as Netflix," he said.
     
  2. PapaG

    PapaG Banned User BANNED

    Joined:
    Sep 23, 2008
    Messages:
    32,870
    Likes Received:
    291
    Trophy Points:
    0
    Location:
    Tualatin, OR
    I loved House of Cards, as well as the Arrested Development update, but until reading this, I realize I haven't watched a thing on Netflix for the last 2 months, nor has the rest of the family.

    It's a stealth business model, much as the BMG Music club was in the late '80s/early '90s. I'm still not sure what to think of Netflix, but somebody is going to have to pay for Kevin Spacey showrunning and starring in a 'network original.'
     
  3. santeesioux

    santeesioux Just keep on scrolling by

    Joined:
    Dec 3, 2008
    Messages:
    10,720
    Likes Received:
    5,273
    Trophy Points:
    113
    Occupation:
    Trolling the internet
    Location:
    Southern Oregon
    Yep, i watched that Star Wars show on it recently, but before that it had been a very long time since i had watched anything on it. It doesn't help that most of the stuff they add to streaming i've already seen or rented from them in the past. I like more specialized services like Hulu Plus (if they got rid of the commercials for paying customers) or Crunchyroll theses days.
     
  4. blue32

    blue32 Who wants a mustache ride?

    Joined:
    Oct 15, 2008
    Messages:
    8,613
    Likes Received:
    2,102
    Trophy Points:
    113
    Yah, blame comcast. Comcast was charging netflix more money to un-fuck netflix's traffic to the users. So they created a special "network" just for Comcast/Netflix communication.

    Those costs were given to the consumer. On the up-side, the streaming is faster/better.

    So basically, We pay comcast twice now.
     
  5. Further

    Further Guy

    Joined:
    Sep 20, 2008
    Messages:
    11,098
    Likes Received:
    4,037
    Trophy Points:
    113
    Occupation:
    Stuff doer
    Location:
    Place
    Within the next 5 years I expect to cancel my cable all together, and just go with Netflix, Hulu and the zillion other online content providers. We aren't quite there yet, but pretty damn close. If I could just pay $10 a month for an online sports package, I'd be switched already.
     
  6. Denny Crane

    Denny Crane It's not even loaded! Staff Member Administrator

    Joined:
    May 24, 2007
    Messages:
    72,957
    Likes Received:
    10,620
    Trophy Points:
    113
    Occupation:
    Never lost a case
    Location:
    Boston Legal
    Netflix gave Kevin Spacey $100M to make House of Cards. Most of the $8 we pay goes for licensing all the shows people binge watch. There are no commercials, which rocks. Netflix is also going to be a major source for 4K programming.

    It seems to me we get a bargain at a higher price, and I'd like to see more original programming, which costs money.
     
  7. PapaG

    PapaG Banned User BANNED

    Joined:
    Sep 23, 2008
    Messages:
    32,870
    Likes Received:
    291
    Trophy Points:
    0
    Location:
    Tualatin, OR
    Yes, this is why they are raising rates. Nobody disagrees with you on this.
     
  8. EL PRESIDENTE

    EL PRESIDENTE Username Retired in Honor of Lanny.

    Joined:
    Feb 15, 2010
    Messages:
    50,346
    Likes Received:
    22,528
    Trophy Points:
    113
  9. Cryptkeeper

    Cryptkeeper Forum Bourgeoisie Staff Member Global Moderator

    Joined:
    Sep 8, 2006
    Messages:
    841
    Likes Received:
    48
    Trophy Points:
    28
    Occupation:
    S2 Hurrdurrator
    Location:
    SportsTwo
    [​IMG]
     

Share This Page