Netflix Inc. CEO Reed Hastings came out publicly against the $40 billion Comcast-Time Warner Cable merger, saying it would create a company with two much control over Web traffic the same day he said Netflix plans to raise prices for subscriptions to his TV and movie streaming service. The company today also beat analysts' estimates for its first-quarter earnings.
"If the Comcast and Time Warner Cable merger is approved, the combined company’s footprint will pass over 60 percent of U.S. broadband households, after the proposed divestiture, with most of those homes having Comcast as the only option for truly high-speed broadband," the company said in a letter to shareholders.
Sen. Al Franken urged Netflix CEO Reed Hastings to publicly oppose the measure last week and Hastings wrote a blog post supporting "strong Internet neutrality," but the shareholders' letter and Hastings' comments during his call with investors were the first time the company targeted the deal specifically.
Netflix in its earnings call said it plans to increase its $7.99 subscription by up to $2 for new customers.
"Our current view is to do a one or two dollar increase, depending on the country, later this quarter for new members only," the company said in its shareholders letter. "Existing members would stay at current pricing (e.g. $7.99 in the U.S.) for a generous time period."
Netflix's shares rose more than 7 percent in after-hours trading on news that it earned 86 cents a share on revenue of $1.27 billion, compared to analysts' estimates of 83 cents a share on $1.27 billion in revenue. The company earned $53 million in net income.
Netflix said its U.S. streaming service grew to 35.7 million members, an increase of 2.25 million. Internationally, membership grew to 12.7 million, an increase of 1.75 million.