Netflix to raise prices

SAN FRANCISCO >> Netflix is preparing to raise its Internet video subscription prices by as much as $2 per month this summer to help pay for more programming such as its popular political drama "House of Cards."

The price increase will be imposed on new customers by July. The company says current U.S. subscribers will continue to pay $8 per month for a "generous time period."

Netflix announced the price increase as part of its first-quarter earnings released Monday.

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LOS ANGELES (Reuters) - Video streaming service Netflix Inc reported higher profit that beat Wall Street expectations and said it intends to raise the monthly subscription price for new customers, sending its stock up 6.5 percent in after-hours trading.

Net income for the quarter that ended in March reached $53 million, Netflix said on Monday, an increase from $3 million a year earlier. Earnings-per-share came in at 86 cents, topping the average forecast of 83 cents, according to analysts surveyed by Thomson Reuters I/B/E/S.

Netflix said it added 2.25 million customers to its U.S. streaming business during the quarter, in line with the company's earlier guidance.

The company, in a quarterly letter to shareholders, said it plans to impose "a one or two dollar increase, depending on the country, later this quarter for new members only." It did not name the countries. Existing customers would keep their current price "for a generous time period," it said.

Shares of the company jumped 6.5 percent to $371.26 in after-hours trading, up from their earlier close of $348.49 on Nasdaq.

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Hmm.  A dollar increase would mean 3 cents a day.  Two dollars would be 6 cents.  Wait, actually more like 7 cents!

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Meanwhile, Netflix's DVD-by-mail service is slowly dying. Through March, Netflix had 6.7 million DVD customers, a 52 percent drop from 13.9 million just two years ago. Netflix isn't changing its DVD prices, despite rising postal costs.

Netflix's comeback has been propelled by the company's increasing emphasis on exclusive programming such as "House of Cards," an acclaimed series starring Kevin Spacey as a cunning politician with a ruthless plan to become President of the United States. Netflix released all 13 episodes in "House of Cards'" second season on Feb. 14, midway through the first quarter.

Another popular Netflix series, "Orange Is The New Black," is returning with new episodes June 6, toward the final month of the current quarter.

Even with "Orange Is The New Black," Netflix is only expecting to attract 511,000 U.S. subscribers from April through June before prices rise for new customers. That would be down from an increase of 630,000 U.S. subscribers at the same time last year.

Netflix Inc. earned $53 million, or 86 cents per share, during the first three months of the year. That compared to $2.7 million, or 5 cents, last year. The latest quarterly earnings exceeded the average estimate of 81 cents per share among analysts surveyed by FactSet.

Revenue rose 24 percent from last year to $1.3 billion to match analyst projections.

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 Netflix is raising its Internet video prices by $1 per month for new customers and giving its current U.S. subscribers a two-year break from the higher rates.

The changes mean anyone signing up for Netflix's video subscription service beginning Friday will pay $9 per month for in the U.S. The old price of $8 per month will continue until May 2016 for Netflix's existing 36 million U.S. subscribers.