Queue the tirades of angry internetizens threatening to cancel/never do business with Netflix ever again…
In their shareholder earnings call, Netflix detailed their first quarter 2014 numbers. Subscribers are up 2.2 million, Â They’re seeing strong growth internationally, and overseas losses shrank by almost half, expecting profitability by end of year. Revenue was up around $200 million, but costs also rose in the light of the number of original programs to be produced and advertised. No fewer than eleven new series or new seasons of established season are in the pipeline.
A Netflix app will be coming to cable services which use TiVO DVR’s, with a hopeful nod at additional cable DVR’s in the future.
Revenue is a precious commodity, as Netflix ramps up an extremely aggressive production schedule of new shows, and potentially “bribing” ISP’s to not throttle their data connection. The earnings letter featured an entire section on Net Neutrality.
The Internet faces a long term threat from the largest ISPs driving up profits for themselves and costs for everyone else as detailed in our recent blog post.
If the Comcast and Time Warner Cable merger is approved, the combined company’s footprint will passover 60 percent of U.S. broadband households, after the proposed divestiture, with most of those homes having Comcast as the only option for truly high-speed broadband (>10Mbps). As DSL fades in favor of cable Internet, Comcast could control high-speed broadband to the majority of American homes. Comcast is already dominant enough to be able to capture unprecedented fees from transit providers and services such as Netflix. The combined company would possess even more anticompetitive leverage to charge arbitrary interconnection tolls for access to their customers. For this reason, Netflix opposes this merger.
Netflix believes that this modest of a price hike will have little impact over the next fiscal year.
Will Netflix’s rate increase change your plans for future video streaming services? Leave us a comment below!