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Summary:

Netflix will raise its streaming prices for the first time since 2010 this quarter. New customers may soon have to pay as much as $10 per month.

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New Netflix subscribers could soon be forced to pay a bit more for the company’s streaming service: The company announced in its first-quarter earnings letter to shareholders that it intends to raise the prices for new members by $1 or $2 this quarter.

CEO Reed Hastings and CFO David Wells wrote:

“In the U.S. we have greatly improved our content selection since we introduced our streaming plan in 2010 at $7.99 per month. Our current view is to do a one or two dollar increase, depending on the country, later this quarter for new members only. Existing members would stay at current pricing (e.g. $7.99 in the U.S.) for a generous time period. These changes will enable us to acquire more content and deliver an even better streaming experience.”

Netflix had previously said that it wanted to experiment with new pricing tiers, but didn’t seem in rush to implement any pricing changes at the time. However, the company also experimented with price increases for new members in Ireland, and the results seem to have encouraged the company to raise prices in other markets as well. Existing customers in Ireland are grandfathered into their old plans for two years, according to the letter to shareholders.

The announcement comes as Netflix ended another quarter of strong international growth. In Q1 of 2014, the company added 1.75 million international subscribers, compared to 1.02 million in Q1 of 2013. Altogether, Netflix now has 12.68 million international subscribers, compared to 7.14 in Q1 of 2013.

In the U.S., Netflix added 2.25 million streaming subscribers, compared to 2.03 million in Q1 of 2013. This means that Netflix now has 35.61 million streaming subscribers in the U.S., and a total of 48.35 million streaming subscribers worldwide.

Despite this growth, the company reported solid financials for Q1: Including all of its business segments, Netflix generated revenue of $1.07 billion in Q1 of 2014, compared to 1.02 billion in Q1 of 2013.

The company earned a net income of $53 million, compared to $3 million a year ago, in part due to much lower international losses, which fell from $77 million in Q1 of 2013 to $35 million in Q1 of 2014. The company expects to be profitable in existing international markets by the end of the year.

Updated at 2:52pm with more information on Netflix’s Q1 net income.

  1. Dave Lindhout Monday, April 21, 2014

    Thanks, Comcast.

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  2. It would be acceptable if they offered a commensurate increase in the quality of content; but as it stands, the quality content leaves much to be desired in all areas from user interface, movie selection and television shows. The current PS4 and XBOX ONE console leave no further excuse for such a creatively lean UI. For the moment, as am already existing customer, I will keep the subscription. But if Netflix raises the cost on existing consumers once more, I think it will be time to severe our relationship. As it is, they are displaying the cliche capitalistic modus operandi–squeeze the cash cows and feed them little. Shame

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    1. I understand the general gripe with this – after all, it’s a natural first reaction to finding out you may soon have to pay more than you currently do for a service. But no, this is not a shame. This is not despicable, and they’re not doing it just because “they can”. Give me a break. First of all, even paying ten bucks a month for thousands of hours of ad-free content is still a really great deal (and to those of you who still claim that Netflix has a ‘horrible selection’ – expand your horizons or unsubscribe already, would ya?). Second, as mentioned in the Netflix statement above, the increase in revenue will allow the site to bring in more content than is currently available. Is it really that much to ask? If Netflix had sent you a personal email stating that, “Hello, we’d like to make Netflix an even more awesome site than it already is, but do you think you could spare an extra $24 a year? Please check Yes or No”, you’d say “Sure” in half a heartbeat.

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      1. Actually, they ARE doing it because “they can”. AT&T has announced entry into the ‘Netflix’ delivery model – why not do the profit-taking NOW and line the CEOs pockets with performance bonuses, before the ‘invisible hand’ of competition forces them to lower prices?
        Did Netflix ALREADY forget how their disastrous pricing increase of 2011 pretty much killed off their DVD business?

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  3. It would be acceptable if they offered a commensurate increase in the quality of content; but as it stands, the quality content leaves much to be desired in all areas from user interface, movie selection and television shows. The current PS4 and XBOX ONE console leave no further excuse for such a creatively lean UI. For the moment, as am already existing customer, I will keep the subscription. But if Netflix raises the cost on existing consumers once more, I think it will be time to severe our relationship. As it is, they are displaying the cliche capitalistic modus operandi–squeeze the cash cows and feed them little. Shame.

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  4. I blame Comcast double-dipping.

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  5. And that’s just with a couple original series. If they tried to REALLY compete with the cable networks with a full slate of original programming, it would have to price itself the same as HBO, if not more.

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  6. Maurice Fazekas Monday, April 21, 2014

    I just canceled my Netflix account a week ago..too much for too little. now they are raising prices? I can find more watchable content for free on the net. bad move netflix!

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  7. Compared to HBO, SHOWTIME, STARS, and CINAMAX adding up to if not more $64.00 a month. I’ll be glad to pay $10.00 a month, Netflix has pretty good line up for the price. I love me some Netflix.

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