Our latest update on how Netflix is doing is here, and buried within the earnings details the company revealed two announcements that have been a long time coming: it's raising prices for new customers, and it is (after years of rumors) going to offer service on cable-provided DVRs in the US soon. The price hike later this quarter will be for new members only and is expected to be a "one or two dollar" increase, while current subscribers will be grandfathered in at their current rates "for a generous time period." The big question for Netflix? Now at 48 million customers strong (37.5 million in the US), can it push through a price hike without the customer losses it experienced the last time it changed pricing? In January it increased prices in Ireland by one euro per month and grandfathered current customers in at their existing price for two years, and says it saw "limited impact" as a result. Netflix executives will take investor's questions live on YouTube in just a few minutes, watch here or check after the break for any interesting details.
As far as a Netflix app on cable boxes, the bad news is that initially it's not going to be on the boxes most of you likely have, but it will start with providers that use TiVo DVRs (Suddenlink and RCN for example, which both already have deals with Netflix and TiVo) and "try" to extend beyond after that. That's similar to how it's rolled out on European services so far, but the US could be tricky. Among the reasons why is Netflix's battle with ISPs over how to deal with the bandwidth it's streams are taking up.
In this quarter's letter to shareholders, executives Reed Hastings and David Wells explain that Netflix opposes the Time Warner Cable-Comcast merger because it would "would possess even more anti-competitive leverage to charge arbitrary interconnection tolls for access to their customers. Netflix is also calling out AT&T for its lackluster performance, saying U-verse has lower performance than other DSL providers. If the telecom thinks it's going to wrangle payments from Netflix the way Comcast did it may have a fight on its hands, as Netflix keeps pushing its no-cost OpenConnect option.
The other big target is HBO, as Netflix is "eager to close the gap" between its 48 million subscribers and HBO's 130 million. On the earnings call, CEO Reed Hastings specifically called out content costs as a reason for the change in pricing, and it's no surprise. Netflix has laid out an expanded slate of originals that's highlighted by season two of Orange is the New Black this summer, as well new series like Sense8, Marco Polo and Narcos. There are also deals with a number of studios for a content, including one with Disney, which will provide Netflix with first-run access to its films starting in 2016.