Netflix Poised To Raise Prices After Strong Q1

Netflix is preparing a sequel unlikely to be a hit with its subscribers. The Internet video service is about to raise its prices for the first time in three years to help pay for more Internet video programming such as its popular political drama "House of Cards."

The increase, to take place sometime before July, will hike prices by $1 or $2 per month for new customers. The company's nearly 36 million current subscribers will continue to pay $8 per month for at least the next year, Netflix CEO Reed Hastings said in a Monday interview.

"When we look at the shows and movies that we will be able to get if we have a bigger budget, it's exciting," Hastings told The Associated Press. "We want to make the service better and better so more people will join."

Netflix announced the looming price increase as part of a solid first-quarter earnings report.

Financial pressures have been mounting on Netflix as it grapples with the rising costs of licensing compelling video for its service. The company has been spending more to compete against traditional cable-TV channels such as HBO and Showtime, as well as technology companies such as Amazon.com Inc., Hulu.com, Microsoft Corp. and Yahoo Inc., which are planning to buy more Internet video programming from Hollywood studios.

"I think they need to raise the price to remain profitable," Wedbush Securities analyst Michael Pachter said of Netflix.

Amazon recently raised the price of its Prime service, which includes an expanding Internet video library, from $79 to $99 annually.

Investors evidently like the prospect of Netflix bringing in more revenue. Netflix's stock surged $23.01, or 6.6 percent, to $371.50 in extended trading after the company announced its plans.

Price increases pose a risk for Netflix. The Los Gatos, California, company was stung by a customer backlash in 2011, when it...

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