Netflix Intends to Use House of Cards to Take Over the World
Updated from 8:34 a.m. to include updated share price and news about Amazon's HBO deal.
NEW YORK (TheStreet) -- Netflix (NFLX - Get Report) is the dominant streaming service in the United States, with more than 35 million (and counting) subscribers. Now the company plans to take over the rest of the world, starting with Europe.
Netflix announced Wednesday that it plans to "significantly expand in Europe later this year, offering a wide-range of entertainment for a low monthly price in Germany, Austria, Switzerland, France, Belgium and Luxembourg."
Netflix currently has more than over 48 million members in more than 40 countries who watch more than 1 billion hours of content per month. In recent years, Netflix has been expanding internationally. In 2012, Netflix launched in the U.K. and Ireland, Denmark, Finland, Norway, and Sweden. In 2013, the company started services in the Netherlands.Shares of Netflix were higher in trading on Wednesday, gaining 1.66% to $377.85.
In a press release, Netflix didn't disclose pricing, programming and supported devices, noting that the information "will be available at a later date."
Though Netflix didn't announce pricing for the additional European markets, it's clear new consumers will have to pay more than previous consumers. Embedded in the first-quarter letter to shareholders, 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 toward spending on original content. The revenue increase in the short-term would be "modest." On the conference call to discuss first-quarter earnings, CEO 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." Los Gatos, Calif.-based Netflix earned 86 cents a share on $1.27 billion in revenue for the first quarter. Analysts surveyed by Thomson Reuters were expecting the company to earn 83 cents a share on $1.266 billion in revenue for the first quarter.