Netflix raises fees, watches membership rise in second quarter


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Netflix’s quarterly numbers are in, and they’re looking good. The streaming video service’s paid subscriber base grew to a shade under 48 million users during the second quarter. And Netflix says it’s topped the 50 million mark for total membership.

And Netflix hit that milestone despite its decision to boost fees for new members starting in May. New subscribers now pay $9 a month for a Netflix membership; previously the fee was $8. Either the extra dollar didn’t dissuade people from signing up with Netflix, or it encouraged them to join before the rate hike went into effect. Whatever the reason, paid global membership rose to 47.99 million in the second quarter, up 4 percent from the first three months of 2014. And Netflix projects it to rise another 6 percent during the third quarter.

In its letter to shareholders, though, Netflix touted a different number—that its total subscriber base now tops 50 million when you count free memberships. Total quarterly revenue jumped 25.3 percent during the second quarter to $1.34 billion.

With three-quarters of its paid membership—that’s a little more 35 million people—residing in the U.S., Netflix is turning its gaze toward expanding its international subscription base. “In September, we’ll be launching Netflix in Germany, France,  Austria, Switzerland, Belgium, and Luxembourg,” said Netflix’s letter to shareholders. “This launch into markets with over 60 million broadband households will significantly increase our European presence and raise our current international addressable market to over 180 million broadband households, or [two times] the number of current U.S. broadband households.”

Winning over Europeans may not be as simple as exporting current Netflix hits such as House of Cards to the continent, Netflix CEO Reed Hastings admitted. Add issues such as local programming requirements in France, and the company may need to produce regionally-targeted content. “So instead of House of Cards, it might be House of Versailles,” Hastings quipped during the earnings presentation.

Netflix’s letter to subscribers contained one other piece of news: Look for physical gift cards to start appearing in select stores near you (assuming you happen to be reading this in the U.S., Canada, Mexico, or Germany). Netflix says the cards will extend its brand presence in mature markets while making it easier to sign up for the streaming video service in other countries.

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