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Netflix plans to raise prices as U.S. streaming subscriptions grow

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By Lisa Richwine

LOS ANGELES (Reuters) – Video streaming service Netflix Inc said it intends to raise the monthly subscription price for new customers by $1 or $2 a month to help the company buy more movies and TV shows and improve service for its 48 million global subscribers.

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Investors welcomed the announcement by Netflix, which had suffered from a consumer exodus and stock plunge after it announced an unpopular price increase in July 2011. The company’s shares jumped 6.7 percent in after-hours trading to $371.97, after the company released plans for a price hike and posted a rise in first-quarter profit that beat Wall Street expectations.

Chief Executive Reed Hastings said Netflix had improved its selection of TV shows and movies and added original series like critically acclaimed Kevin Spacey thriller “House of Cards.”

With added revenue from higher prices, “we will be able to license much more content and deliver it in very high quality video,” Hastings said on a webcast.

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.

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Netflix has “room to raise prices,” FBN Securities analyst Shebly Seyrafi said, because “they’re still seeing a lot of demand” for the service.

The company said in its earnings report it added 2.25 million customers to its U.S. streaming business during the quarter that ended in March, in line with the company’s earlier guidance, for a total of 35.7 million. In international markets, its customer base reached 12.7 million, a gain of 1.8 million during the quarter.

Net income for the quarter reached $53 million, 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.

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During the quarter, it released the second season of critically acclaimed Kevin Spacey drama “House of Cards.”

Netflix is investing in original series, such as “House of Cards” and “Orange is the New Black” to attract and keep subscribers. If faces competition from online video players like Amazon.com Inc and Hulu, as well as on-demand content from cable operators.

Netflix also said it opposed Comcast Corp’s proposed purchase of Time Warner Cable Inc. In March, Netflix reluctantly agreed to pay “interconnection” fees to Comcast for faster delivery of its TV shows and movies.

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“Comcast is already dominant enough to be able to capture unprecedented fees from transit providers and services such as Netflix,” the company said in its letter. “The combined company would possess even more anti-competitive leverage to charge arbitrary interconnection tolls for access to their customers.”

Netflix said those fees had improved Netflix service for Comcast customers, but singled out AT&T’s fiber-based U-Verse as providing “lower performance” than many other providers.

(Reporting by Lisa Richine; Edited by Ronald Grover, Bernard Orr)

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[Image via Agence France-Presse]

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… then let us make a small request. Like you, we here at Raw Story believe in the power of progressive journalism — and we’re investing in investigative reporting as other publications give it the ax. Raw Story readers power David Cay Johnston’s DCReport, which we've expanded to keep watch in Washington. We’ve exposed billionaire tax evasion and uncovered White House efforts to poison our water. We’ve revealed financial scams that prey on veterans, and efforts to harm workers exploited by abusive bosses. We’ve launched a weekly podcast, “We’ve Got Issues,” focused on issues, not tweets. Unlike other news sites, we’ve decided to make our original content free. But we need your support to do what we do.

Raw Story is independent. You won’t find mainstream media bias here. We’re not part of a conglomerate, or a project of venture capital bros. From unflinching coverage of racism, to revealing efforts to erode our rights, Raw Story will continue to expose hypocrisy and harm. Unhinged from corporate overlords, we fight to ensure no one is forgotten.

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White House spokesperson ridiculed for ‘pathetic’ spin on Trump’s trade war admission: ‘Does she think we believe that?’

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Hours after Donald Trump blithely admitted that he had "second thoughts" about his trade war with China that has damaged the U.S. economy and helped set the stage for a possible recession, White House spokesperson Stephanie Grisham was forced to issue a clarification about the president's comments.

Addressing Trump's G7 response about his tariffs, widely interpreted by the press as expressing some regret, Grisham issued a statement saying the president meant that he wished he had increased his market-destroying tariffs even more.

"The President was asked if he had ‘any second thought on escalating the trade war with China,'" White House press secretary Stephanie Grisham relayed. "His answer has been greatly misinterpreted. President Trump responded in the affirmative - because he regrets not raising the tariffs higher."

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Here is why Trump is obsessed with Greenland

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They say that history repeats itself, first as tragedy, then as farce. Remember that President Harry Truman tried to purchase Greenland in 1946; now, in 2019, President Donald Trump is trying to do the same thing.

This article first appeared in Salon.

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Iowa Republican Steve King is facing losing his seat representing his district in the U.S. House of Representatives as his campaign finds itself broke and the Republican Party has turned its back on him after his latest round of controversial comments.

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Even worse, his colleagues in Congress have also abandoned him.

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