Programming alert: How to rescan your TV to keep watching JOEtv with your antenna

Netflix to increase subscription prices

This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated.
Business Leaders Meet In Sun Valley, Idaho For Allen And Co. Annual Conference

Reed Hastings, (R) CEO of Netflix, speaks with Stephen Burke, (L) president and CEO of NBCUniversal, and Ted Sarandos, vice president of content at Netflix, as they attend the Allen & Co. annual conference on July 11, 2013 in Sun Valley, Idaho. (Photo by Kevork Djansezian/Getty Images)

NEW YORK (CNNMONEY) — Netflix prices are going up.

The streaming video company said Monday that it planned to increase subscription prices for new customers by $1 or $2 a month within the next few months. Existing subscribers will be able to continue at their current rate “for a generous time period,” Netflix said.

U.S. streaming subscribers currently pay $7.99 a month, a plan introduced back in 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.”

“If we want to continue to expand, to do more great original content … we have to eventually increase prices a little bit,” Netflix CEO Reed Hastings said in a conference call with analysts Monday.

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 and earnings that came in ahead of analyst expectations.

Netflix added 2.25 million new streaming subscribers in the first three months of the year, just a shade off pace from the fourth quarter of 2013, which was its best in three years. The service now has nearly 36 million subscribers in the U.S. and over 48 million globally.

Netflix has made a splash with its foray into 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 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.”

Netflix has also been in the headlines because of a public spat with Internet service providers including Comcast, Verizon and AT&T over flagging streaming speeds.

The ISPs want Netflix to help bear the cost of delivering its data-heavy content by paying a fee to connect directly to their networks; Netflix says that responsibility belongs with the ISPs, though it reluctantly agreed to a connection deal with Comcast earlier this year.

In the letter to shareholders released Monday, Hastings and Netflix CFO David Wells returned to this dispute, accusing ISPs of “driving up profits for themselves and costs for everyone else.” The Netflix executives came out strongly against the pending merger of Comcast and Time Warner Cable, which would unite the nation’s two largest cable companies.

“Comcast is already dominant enough to be able to capture unprecedented fees from … services such as Netflix,” Wells and Hastings wrote. “The combined company would possess even more anti-competitive leverage.”


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

1 Comment

  • pam

    The lagging isp providers should be responsible for their own crappy service and not try to spank Netflix for it. Frankly, I think the isp providers are buttheads and greedy bastards. I have Verizon and they SUUUUUUUUUUUUUCK! If Netflix gives in to the demands of the isp providers SHAME ON THEM! Do NOT be held hostage, Netflix!!!

Notice: you are using an outdated browser. Microsoft does not recommend using IE as your default browser. Some features on this website, like video and images, might not work properly. For the best experience, please upgrade your browser.