Los Angeles: Streaming giant Netflix gained 9.6 million streaming customers in the first quarter of 2019. But a price hike in the US and other countries is slowing its momentum going into the second quarter.
The company reported paid net adds in Q1 of 9.6 million (with 1.74 million in the US and 7.86 million internationally), up 16 per cent year over year, reports variety.com.
For Q1, Netflix reported $4.52 billion in revenue, up 22 per cent year over year, which was slightly above Wall Street’s consensus estimate of $4.50 billion.
Netflix is currently rolling out a price hike for all customers in the US and other markets, with its Standard plan (two HD streams) increasing from $10.99 to $12.99 per month. The higher fees are kicking in over the course of Q1 and Q2, according to the company.
The price increases are rolling out in the US, Brazil, Mexico and parts of Europe.
“The response in the US so far is as we expected and is tracking similarly to what we saw in Canada following our Q4 2018 increase, where our gross additions are unaffected, and we see some modest short-term churn effect as members consent to the price change,” Netflix said in its shareholder letter.
With the price hikes, Netflix is forecasting Q2 average revenue per subscriber to increase 2 per cent (versus -2 per cent in Q1) with total revenue increasing 26 per cent in Q2 to $4.93 billion.
Netflix is banking on a big slate of originals to attract and retain subscribers through the back half of the year.
“We’re looking forward to a strong slate of global content in the second half of the year, including new seasons of some of our biggest series, ‘Stranger Things’, ’13 Reasons Why’, ‘Orange Is the New Black’, ‘The Crown’ and ‘La Casa de Papel’ (aka ‘Money Heist’) as well as big films like Michael Bay’s ‘Six Underground’ and Martin Scorsese’s ‘The Irishman’,” the company said.