This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Would You Pay More For Netflix?

NEW YORK (TheStreet) -- Netflix (NFLX - Get Report) reported first-quarter results and announced a price hike for new customers, noting existing customers will keep their current pricing "for a generous time period." Will new customers shun the streaming service?

Concerning the price increase, CEO Reed Hastings said there will be an increase for new members of $1 or $2, depending on the country. "Existing members would stay at current pricing (e.g. $7.99 in the U.S.) for a generous time period," Hastings noted. "These changes will enable us to acquire more content and deliver an even better streaming experience." On the call, Netflix said that most of the increase in revenue from the price increases would go towards spending on original content. The revenue increase in the short-term would be "modest." Netflix did not say when the price increase would go into effect. 

Though Hastings didn't quantify when existing members would see the price bump, JPMorgan analyst Doug Anmuth, who helped moderate the call, noted it would be "likely two years in the U.S."

As the company continues to do more original programming, Netflix is reinvesting the proceeds from the price hike towards content. On the conference call, Chief Content Officer Ted Sarandos noted that Orange Is the New Black, a Netflix original, is the company's most watched show.

The popular political thriller House of Cards helped drive subscriber growth during the quarter, with Sarandos noting, "We saw a lot of very early front weighted viewing for the launch, which kind of told us that America was ready for more and dug in right away. And as we mentioned in the letter, we have been actually thrilled so far with the show from the early launch relative to how you would measure television on any show on basic cable or premium cable, and I only give you that information, by the way, to help you understand the class of viewing to think about a show like House of Cards."

On the conference call, Hastings continued to reiterate that Netflix's total addressable market in the U.S. is between 60 million and 90 million households, but throughout the world, it's "everyone who loves TV and has the Internet."

TheStreet has set up a poll asking if readers would pay more for Netflix. Results of the poll will be up in a few days.

Netflix price hike! Would you pay $9.99 a month for a subscription? in TheStreet's Hangs on LockerDome

--Written by Chris Ciaccia and Laurie Kulikowski in New York

>Contact by Email.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
NFLX $618.60 -0.53%
AAPL $131.31 -0.93%
FB $79.75 -0.98%
GOOG $532.90 -1.30%
TSLA $248.80 0.43%

Markets

DOW 18,103.70 -128.32 -0.70%
S&P 500 2,113.25 -12.81 -0.60%
NASDAQ 5,055.7120 -33.65 -0.66%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs