Strong first quarter earnings have sent Netflix shares soaring this week.
The streaming media giant’s shares jumped by 24 per cent to $216 (£140) after it announced positive news during its earnings call for the first quarter of 2013. The company said it gained three million subscribers worldwide during the first three months of the year, with two-thirds of those new customers based in the US.
Netflix brought in revenue of $1.02 billion (£670 million) during the quarter - the first time it’s passed the $1 billion (£660 million) milestone. The company posted profits of $3 million (£2 million) on that revenue, an amount that may strike as miniscule but marks a considerable improvement from the $5 million (£3.3 million) loss it recorded during the same period last year.
Netflix executives were eager to boast about the company’s move into original programming, which they credited with part of its first quarter success.
“The launch of ‘House of Cards’ provided a halo effect on our entire service,” wrote Netflix chief executive Reed Hastings and chief financial officer David Wells in a letter to shareholders. Customer response to the show “increased our confidence in our ability to pick shows Netflix members will embrace and to pick partners skilled at delivering a great series,” the pair added.
Netflix also introduced a new family-style subscription option designed to counter the potential losses caused by password sharing. For a $12 (£8) per month, US customers will be able to use a single account to simultaneously stream content to four different devices. Under the current plan, which costs $8 (£5.25) in the US and £6 in the UK, users are entitled to two simultaneous streams.
There’s no word yet on whether the family plan will be limited to the US or whether we can expect to see it here in the UK and in other international markets, too.