The good times keep on rolling for Netflix, but the company sees storm clouds ahead.
Netflix announced earnings on Wednesday that beat expectations for both subscriber additions and earnings per share. Investors were cheered by the results, with Netflix shares rising more than 17% in after-hours trading.
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Revenue was reported at $1.18 billion, just above estimates, while profit for the company easily beat estimates. Earnings per share of $0.79 topped analyst expectations of $0.66. The company attributed the profit growth to the ability to grow revenue without incurring additional content costs.
The report also details the company's move to create multiple subscription options for customers. Netflix recently rolled out a "single stream" option, and is now eyeing other plans that will appeal to various consumer groups.
New options offer varied pricing depending on how many streams a customer seeks to use simultaneously. The company said it is also exploring plans that offer standard and high definition streaming at different prices.
"Eventually, we hope to be able to offer new members a selection of three simple options to fit everyone’s taste," the company said in its earnings release (PDF).
Netflix did issue a word of warning on net neutrality. The company's stock took a hit after the recent ruling by the U.S. Court of Appeals for the District of Columbia that struck down the FCC's Open Internet rules.
"The motivation could be to get Netflix to pay fees to stop this degradation," the company said. "Were this draconian scenario to unfold with some [internet service provider], we would vigorously protest and encourage our members to demand the open Internet they are paying their ISP to deliver."
The company said it did not expect Internet providers to pursue such a strategy, but added that it regulation would be needed if ISPs did decide to go down that road.
"To the degree that ISPs adhere to a meaningful voluntary code of conduct, less regulation is warranted," the company added in the release. "To the degree that some aggressive ISPs start impeding specific data flows, more regulation would clearly be needed."
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