Netflix Keeps Up Growth Spurt, Adding 4 Million Subscribers in Q1

Netflix slightly exceeded its international forecast for the first three months of the year, adding a net 4 million streaming customers around the world for the period.

For the first quarter of 2014, Netflix added 2.25 million streaming subs in the U.S., in line with its previous guidance, and 1.75 million internationally (vs. previous expectations of 1.6 million). It ended the period with 48.35 million total.

In announcing the Q1 results, Netflix also said it is looking to to increase rates for new subscribers in the current quarter by $1 to $2 per month, depending on the country, but that existing customers would remain grandfathered into existing pricing for a “generous” time period of one or two years.

In after-hours trading Monday, Netflix’s stock climbed as much as 7% to $372.05 per share, after closing up 0.8% for the day at $348.49.

SEE ALSO: Netflix to Raise Prices $1 to $2 per Month for New Subscribers

Netflix also said that in the second quarter of 2014, it will launch the first pay-TV integration of its service in the U.S. That’s after lining up deals with European providers including the U.K.’s Virgin Media to provide access to the unlimited streaming-video service through operator-supplied boxes.

With respect to original programming, Netflix said its strategy of investing in exclusive content continues to gain traction. The company cited the second season of “House of Cards” as attracting “a huge audience that would make any cable or broadcast network happy.” But the company still isn’t disclosing specific numbers.

Netflix beat Wall Street’s Q1 expectations for net income, posting 86 cents per share vs. analysts’ consensus expectations of 83 cents per share according to a Thomson Reuters survey. First-quarter revenue of $1.27 billion was in line with analyst expectations.

The company is forecasting lower net adds for the U.S. in the second quarter — historically its weakest period — but an uptick abroad. Netflix expects 520,000 net new streaming subscribers in the U.S. (vs. 630,000 a year earlier) and 940,000 overseas for Q2 2014 (vs. 610,000 a year earlier).

Netflix also went on record as opposing Comcast’s proposed $45 billion takeover of Time Warner Cable. The resulting cable operator will pass more than 60% of U.S. broadband households, and that would give it unprecedented control over the high-speed Internet market, according to Netflix.

“Comcast is already dominant enough to be able to capture unprecedented fees from transit providers and services such as Netflix,” Netflix CEO Reed Hastings and CFO David Wells wrote in their letter to shareholders. “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.”

In February, Netflix reached a deal with Comcast under which the streaming-video company is paying for direct connections to the cable giant’s Internet networks. Netflix had said the deal was not significant enough to affect its guidance on margins. But Hastings last month issued a call for a “strong” form of net neutrality that would prohibit broadband service providers like Comcast from “charging a toll” to deliver content.

In the second half of 2014, looking to accelerate international growth, Netflix plans to make a substantial expansion into Europe. The company is expected to launch in France this fall, with Germany reportedly on tap for September.

SEE ALSO: Netflix 2014 European Expansion: A Look Ahead

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  1. IVF Center says:

    I have been with Netflix for over 6 years and it only improved over time, there was a plethora of documentaries that weren’t filtered, up to date and original TV series and a vast genre of titles meant Netflix was heading for a 5 star plus rating, but then they put geoblocks on their USA content. The Australian Netflix is still superior to the other streaming companies (I have tried them all) but a huge step down from the USA Netflix. i miss all the conspiracy and quirky doco’s, current TV series and recent movies, we can only hope it improves and catches up with the USA Netflix.

  2. Frank McLaughlin says:

    For the past several years I have been extremely unhappy with the NETFLIX picture quality during peak periods. Feeds would sometimes drop to .5 mb making it unwatchable. Comcast would blame NETFLIX and NETFLIX would infer that my connections were at fault. Last night the NETFLIX feed came in at between 30-40 mb and the picture was perfect. I think most of the problem could be solved if I could choose which programming availabilities I pay for at COMCAST (a la carte) to include NETFLIX.

  3. navdeep says:

    Most Netflix customers are happy with the service, according to the survey. Overall Netflix satisfaction levels are now at record levels, with 66% of current subscribers responding that they are either “extremely satisfied” or “very satisfied” with their service, up from 62% one year ago.

  4. We were getting Netflix Streaming up until 2 weeks ago,seems to be a problem with Smart Tv’s,now we no longer can watch anything on streaming,we have called Neflix,and they know about the problem,but are not fixing the problem,we are going to change to something else,we didn’t stop Steaming,they stopped us,and this is sad.

  5. Netflix is a very interesting successful business model. You get what you want a really good price. I nixed Direct TV after several years and then my local Cable after acquiring smart TV’s. I figure why pay to watch commercials when I can watch them for free on over the air local channels. I do like a good movie from time to time and Netflix fills this void.

    Now if only TCM (Turner Classic Movies) would adopt this same business model.

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