Netflix Releases Earnings, Announces It Will Soon Charge New Members Higher Prices
Netflix has just released its earnings report for the first quarter, and announced that it has surpassed 48 million global members. Quarterly streaming revenue was over $1 billion. Domestic net additions increased year-over-year to 4 million (from 3.05 million).
Here’s an overview of the financials.
In a letter to shareholders, CEO Reed Hastings and CFO David Wells said:
Our original programming initiatives gained momentum in Q1. House of Cards, for which Season 2 debuted in February, attracted a huge audience that would make any cable or broadcast network happy. The on-demand nature of Netflix means that as we promote Season 2, we can still see significant new enjoyment of Season 1. Netflix members were able to watch the acclaimed documentary MITT within a week of its premiere at the Sundance Film Festival and we garnered our first Oscar nomination for the impactful documentary 3 The Square. During the quarter, we also announced our first original live-action comedy series, Grace and Frankie, featuring Jane Fonda and Lily Tomlin.
Already this quarter, we’ve brought members additional episodes of Turbo F.A.S.T. On May 30, we will launch Season 2 of the Ricky Gervais series, Derek, in most territories and on June 6th, we’ll debut Season 2 of Orange is the New Black, giving our members around the globe the opportunity to immerse themselves in this rich and engaging world.
They also noted that the summer line-up includes Hemlock Grove: Season 2, BoJack Horseman, and the final episodes of The Killing. Without getting into specifics, they said that throughout 2014 and into 2015, we’ll see more kids series from DreamWorks animation, Marco Polo, the still unnamed psychological thriller from the creators of Damages, Daredevil, Sense8, and Narcos.
They also said in the letter:
Outside of North America, we are also becoming the first-run home for many great U.S. TV series. We are releasing those series one episode per week, in order to reduce the time international viewers must wait for local availability. Traditionally, even the most popular American series are withheld from international viewers for several months at a minimum, which has contributed greatly to the growth of piracy. We are tightening that window to less than 7 days, and wherever possible, to within 24 hours. The Breaking Bad spin-off Better Call Saul, as well as From Dusk Till Dawn and Fargo, are among the series premiering on Netflix in international territories.
We also continue to invest heavily in exclusive syndication licenses for some of the best series on television. For example, in the U.S., as Mad Men enters its final season, members can jump in or catch up on every previous season’s episode on Netflix. The Walking Dead, Scandal, Bates Motel, The Following, New Girl, Sherlock and The Vampire Diaries are just a few of the exciting on-air series we offer 4 exclusively in this model. Dexter, House and Breaking Bad are no longer in production, but continue to be discovered and enjoyed everyday by a huge Netflix audience.
They delve into a number of other topics, including marketing, net neutrality, ISP performance, competition, and prices. They say they will increase the streaming plan by one or two dollars, depending on country, for new members. They tried this in Ireland, and the impact was “limited”. New pricing will happen this quarter. Existing members will continue to keep the $7.99 pricing.
You can find the actual financial statements here.
Image via Netflix