Netflix announced better than expected profit results thanks to 3 million new streaming subscribers, despite a fall of more than 200,000 subscribers for its disc rental business.
The Los Gatos, California based company said that 3 million new customers signed up to its streaming service in the last year, bringing the total to 29 million subscribers, with more than 1 million new international customers. This helped the company report a $3 million net income on more than $1 billion in revenue for the reporting period.
CEO Reed Hastings said that the better than expected result was largely due to Netflix's investment in original programming, including the critically acclaimed Kevin Spacey led House of Cards, the new horror series Hemlock Grove, and the upcoming new season of Arrested Development. These shows are exclusive to Netflix, and unlike traditional TV shows, all episodes in a season are released at the same time. "... we are feeling very good about our original strategy including the release strategy of being focused on all episodes at once," stated Hastings in a fiscal call.
Netflix also used the occasion to debut a new "family plan", that allows the same subscription to be shared with more devices. Currently, only two devices can simultaneously access Netflix content, but the new family plan, priced at USD $11.99 (USD $4 more than the standard plan) doubles the number of allowed simultaneous devices to 4. Hastings noted that while only a very small number of existing subscribers are expected to upgrade to this plan, subscribers with large families will now be better served by the new plan.
