During Netflix‘s first quarter earnings call, Peter Kafka of Re/code addressed Hastings about the company’s stream-only philosophy, noting that competitors Amazon and YouTube have enabled downloading some of the videos they offer.
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While it has been very successful, some consumers have resisted Amazon Prime because of the $99 up-front cost for an annual membership.
Streaming TV is about to get more competitive..
Combine those fears with concerns about rising competition from Seattle-based Amazon and the prospect that some USA subscribers could ditch Netflix if monthly prices rises, and it all coalesced into a financial stew that left investors queasy.
More than 22 million US Netflix subscribers will see a price increase in the coming months, the company revealed in a letter to investors on Monday. You can read all about Netflix’s big first quarter in this report from TheVerge.
Part of the reason for that is that after two years of grandfathering prices at .99, Netflix expects to hike monthly fees for many longtime users starting next month.
Netflix produced more original programming than cable’s premium-network leader past year, according to number provided by the two rivals.
Netflix exceeded projections by adding more than 6.7 million net subscribers in the first quarter of 2016, pushing its global tally to more than 81 million subscribers.
Netflix also said that it expected to add just 500,000 members in the United States during the second quarter of this year because of what it described as a “modest impact” from price increases.
Another perk: Amazon Prime Video is the only subscription service to offer members the ability to download “thousands” of movies and TV episodes to iPhones, iPads and Android phones and tablets for offline viewing, the company announced last month. However, the increase in number is found out to be below the same period a year ago when Netflix added 2.28 million subscribers more.
Following an update released by analysts at Needham on Monday the broker has now set a “Buy” rating on shares of Netflix, Inc.
The huge launch in January saw Netflix become available in almost every country in the world except for China, but the letter says the company has no clear plans in breaking into that market just yet.
Overall, a subscription to the Prime Video service for 12 months still sums up to US$108. “I don’t think you are going to see a lot of people bailing out and running for the exits”, said Rosenblatt Securities analyst Martin Pyykkonen – largely because Netflix now has so many shows you can’t find anywhere else.
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HBO, however, still has a huge advantage over Netflix in terms of prestige.
