Subscribers give Netflix a pricing reality check

Netflix's (NFLX) most recent quarter looks as though we're watching a rerun, with some analysts growing tired of the recurring disappointments as CEO Reed Hastings tries to pull in new subscribers.

Things aren't all bad for Netflix, though.

Shares rose 1% in Monday afternoon trading on the stock market today.

Shares in Netflix plummeted nearly 15% following its earnings release on Monday.

Netflix reported earnings of $41 million, or 9 cents a share, on $1.97 billion in streaming revenue, compared with its earlier forecast of a profit of $9 million, or 2 cents a share, on revenue of $1.96 billion. "We are growing, but not as fast as we would like or have been", the company stated.

But some analysts are growing exhausted of excuses, and expressed concerns Tuesday about a more fundamental decline in popularity of the on-demand giant's programming.

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For the half-year to June 30, Netflix posted revenues of $4 billion, operating income of $120 million, and net income of $68 million.

In May 2014, Netflix announced its plan to end a two-year period of grandfathering, releasing existing customers from older payment plans and encouraging them to switch to updated payment options. You'll recall that Netflix raised prices on new subscribers past year, bumping the monthly fee of its most popular streaming plan from $9 a month to $10 a month.

Netflix founder and chief executive Reed Hastings pointed to press coverage of the company's $US2 ($NZ2.80) price rise in the U.S. to explain the company's failure to meet its forecast of gaining 2.5 million new members in the period.

But the most basic reason Netflix gave was simply the timing, around early April, which didn't seem to line up with anything other than a spike in chatter about the price increases. He further stated: "Disrupting a big market can be bumpy, but the opportunity ahead is as big as ever and we continue to improve every aspect of our business". Netflix says the price increase will allow it to invest in more and better content for subscribers. The company's revenue was up 19.5% compared to the same quarter past year.

The 52 week high of shares in Netflix, 133.27 while the 52 week low for the company's shares is 79.95.

Regardless of these setbacks, Netflix put its total global subscriber base at more than 83 million people. Citigroup Inc. restated a "hold" rating and set a $116.00 price target (down from $121.00) on shares of Netflix in a report on Sunday, April 3rd. The company had forecast total streaming revenue forecast of $1.96 billion.

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