NEW YORK – Streaming video company Netflix said Monday that it planned to increase subscription prices for new customers by one or two dollars a month within the next few months. Existing subscribers will be able to continue at their current rate “for a generous time period,” Netflix said.
U.S. streaming subscribers currently pay $7.99 a month, a plan introduced back in 2010. The company raised monthly fees for new subscribers in Ireland by one euro back in January, a change that it said had “limited impact.”
“If we want to continue to expand, to do more great original content… we have to eventually increase prices a little bit,” Netflix (NFLX) CEO Reed Hastings said in a conference call with analysts Monday.
The news came as part of Netflix’s first-quarter earnings announcement. Shares surged 6.6 percent in after-hours trading Monday, after another quarter of strong subscription growth and earnings that came in ahead of analyst expectations.
Netflix added 2.25 million new streaming subscribers in the first three months of the year, just a shade off pace from the fourth quarter of 2013, which was its best in three years. The service now has nearly 36 million subscribers in the U.S. and over 48 million globally.
Netflix has made a splash with its foray into original programming, led by “House of Cards’, the second season of which debuted in February. Season 2 of another Netflix series, “Orange Is The New Black,” is coming June 6.
The online video business is becoming increasingly competitive, however, with streaming services like Hulu, HBO Go and Amazon’s Prime Instant Video. Questioned about this competition Monday, Hastings said that he was a Prime subscriber, and that he viewed it and similar services as “complementary to Netflix.”
“We’re building this ecosystem together that’s about Internet video,” Hastings said. “The more players there are in Internet video, the bigger that ecosystem gets…. and we’re all participating in that transformation.”
Netflix has also been in the headlines because of a public spat with Internet service providers including Comcast, Verizon and AT&T over flagging streaming speeds.
