The company hopes to avoid a repeat of the disastrous pricing scheme of 2011, when a sudden price hike caused a loss of 1 million subscribers for Netflix.
Advertisement
For some companies, beating earnings is just not enough.
While Netflix characterized the forecast as “in line” with previous years – it added 900,000 subscribers in the United States during the same period last year- the news sent shares down more than 10 percent in after-hours trading. That was below the 2.4 million Netflix added during the first quarter that ended in March, and well below Wall Street’s expectations that the company would add 3.5 million global subscribers. Sure if you’re ordering something every week, if you’re a heavy reader, or if you watch Instant Video religiously the original deal is flawless, but if you don’t or if you get for one particular service the yearly subscription doesn’t come off as that useful and you’re married to it for the year.
“Amazon Video will up the ante for acquiring new content. This creates a double-whammy for Netflix-higher content spend and slowing subscriber growth”, Pachter said.
So what: Netflix remains one of the most unpredictable companies on the stock market as its roller-coaster ride over the last five years shows.
This means that long-term customers who are used to paying $7.99 per month, will now be required to pay $9.99 per month.
In the a year ago Netflix, Inc.’s stock price has increased by 0% from 0.00 to 108.4.
Netflix intends to stagger the price increases throughout 2016 to migrate customers gradually to the $9.99 a month fee level.
Both Amazon and Netflix have moved into producing original content in recent years, with numerous new shows proving popular with viewers.
Chief Financial Officer David Wells said that absent the strong performance of launches in Australia and New Zealand a year ago, the worldwide guidance would appear stronger.
In the coming quarters, Netflix plans to add more local languages, content, payment options, and customer support. The growth is largely to do to the fact that Netflix is now available in 130 countries.
Advertisement
During the company’s Q1 earnings call Re/code asked Netflix about this long-standing commitment to streaming only which, which it has repeatedly claimed it will not be compromising on.
