According to a shareholder letter released yesterday (Jan. 18), the SVOD service noted that with the successes of its original content, the company was less focused on second run programming, but are ready to pay top dollar if studios, networks and producers alike are willing to sell. Analysts had expected 7.5 million new subscribers while Netflix itself had forecast 7.6 million.
The basic Netflix subscription is increasing from $8 to $9, the standard plan is going from $11 to $13, and the premium plan will now be $16 instead of $14.
Netflix will also be boosting prices of some other subscription plans and will apply those rates to Latin America and Caribbean countries where it bills customers in United States dollars.
Netflix now has 139 million people around the world paying to beam TV shows and movies to their homes and smartphones.
A Disney streaming service might grow to account for tens of millions of hours of U.S. television viewing over the course of several years, but that is out of a dizzying amount of total time spent watching, Hastings said during an earnings presentation.
Netflix's revenue projection for the first quarter fell short of expectations, but could be due to a similar $180 million foreign exchange headwind that Street analyst's didn't fully incorporate in their models.
To that end, it's not other streaming services like Disney+ or DC Universe that pose a threat to the company - it's actually Fortnite and YouTube that the company fears the most: "We compete with (and lose to) Fortnite more than HBO", Netflix said in its earnings report.
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This marks the fourth price increase that Netflix has rolled out in the US.
"I think about it really as us winning time away, entertainment time, from other activities", Reed Hastings, Netflix's CEO, said in the interview. Some estimates have projected that Netflix could spend upwards of $12 billion this year.
During Friday's pre-market hours, Netflix shares rebounded sharply after analysts oversaw its revenue miss, citing its subscriber growth.
Even more detailed statistics were provided from Netflix including its US market share of 100 million hours of viewing per day.
The company took on new debt last year, reporting free cash flow burn of negative $1.3 billion for the quarter, bringing total outflow to $3 billion for the year.
"So global that Netflix now has 140MM global paid subs - with 80MM of those overseas - and its Paid Sub Adds are likely to increase for the 7th consecutive year". The company said the Spanish series "Elite" was watched in more than 20 million member households worldwide in its first four weeks, while Turkish show "Protector" was watched in more than 10 million. Analysts expected EPS of 24 cents on revenue of $4.21 billion.
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