Netflix Plans To Keep Prices Steady

Netflix plans to stick with its current price structure even as content costs escalate. CEO Reed Hastings said $7.99 a month is “pretty close to the right price” -- acknowledging that $6.99 or $8.99 might also work, but “we're very comfortable where we are.”

Hastings said “once you've picked a price, there's a tremendous value in consumer stability.”

Netflix knows about that -- having endured consumer backlash when it effectively split its DVD-by-mail and streaming services in 2011 and attached a separate price to each instead of a single one for both.

Hastings was asked on an investor event online whether the company would need to issue debt or raise prices to keep offering top-tier content. He indicated that Netflix's growth doesn't augur that.



The company released second-quarter results on Monday, with domestic streaming subscriber net additions up 653,000 -- 100,000 more than the increase in 2012.

The company expects to have up to 31.3 million domestic streaming customers by the end of the third quarter, which would put it above 30 million for the first time.

In the April-June period, Netflix generated $1.07 billion in global revenue, up from about $890 million a year ago. Net income came in at $29 million versus $6 million a year ago. 

Next story loading loading..