updated 05:24 pm EDT, Mon April 21, 2014
New users will need to pay more, existing Netflix subscribers keep current rates
Netflix is planning to raise the price of its service to new members in the near future, among other changes, the company has revealed as part of its quarterly financial results. Following a limited increase in Ireland, the streaming video service is now looking to increase the subscription fee by one to two dollars, depending on the country.
The earnings letter advises that existing members will remain at current pricing levels "for a generous time period." While how long this will be is not known, the company did raise the price for new members in Ireland in January, grandfathering existing subscribers at the cheaper rate for two years. The company believes the price rise "will enable us to acquire more content and deliver an even better streaming service." It is unclear if the streaming service aspect of the statement refers to instances where it pays Internet providers for better connections to their subscribers, such as the agreement made with Comcast.
Owners of DVR appliances in the United States will also stand to benefit from the first set-top box integrations in the country. Just as it has done in Europe, Netflix will be rolling out its app to TiVo set-top boxes, before moving onto other similar devices. Cable companies would benefit from this, in the sense that they would rather have Netflix subscribers use their supplied set-top box than a separate media streamer or smart TV app.
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In terms of the financial results themselves, Netflix earned itself $53 million in net income, up from the $48 million of the previous quarter, as well as a raise in revenue to $1.27 billion, and an earnings of $0.86 per share.
The user count has also increased from the previous quarter, giving it 48.4 million viewers and 46.1 million paying members. There are currently 35.7 million members in the United States, up by 2.25 million in the quarter, with international reach extending by 1.75 million to 12.7 million users.
The company's DVD-by-mail service continues to operate for 6.7 million members, contributing $98 million for the quarter. The company anticipates the revenue to decrease slightly to $92 million for the DVD and Blu-ray service.