Netflix has raised its subscription prices, aiming to capitalize on its recent successes. The streaming giant added a whopping 9 million subscribers in the third quarter, a feat attributed in part to its ongoing battle against password sharing, which has now prompted a price adjustment.
In the U.S., basic subscribers will see a $2 increase, bringing their monthly bill to $11.99, while premium subscriptions will go up by $3 to $22.99. Similarly, in the UK, basic plans will cost an extra £1 at £7.99, and premium subscriptions will rise by £2 to £17.99. This bold move, typically favored by investors, led to a 12% boost in the company’s share price.
Despite last year’s slowdown in subscriber growth, Netflix’s Q3 earnings of $3.75 per share exceeded Wall Street forecasts of $3.52. The company now boasts 247 million subscribers, a notable 11% increase from the previous year.
Netflix’s surge is also attributed to its strategic acquisition of older shows from rival studios, many of which ceased selling content to Netflix after launching their own streaming services. Titles like ‘Suits,’ licensed by NBCUniversal, became global hits, amassing 1 billion viewing hours worldwide on Netflix.
However, Netflix did acknowledge the challenges posed by the recent Hollywood strikes, which led to a significant reduction in new content investment, amounting to $1 billion. Despite this, Netflix’s global approach, with over 70% of subscribers residing outside the United States, mitigated the impact of these strikes. Notably, 4 million of the new subscribers were from Europe, the Middle East, and Africa.
Looking ahead, Netflix remains optimistic, expecting content spending to reach $13 billion in 2023. If the actors’ strike concludes in the near future, the company anticipates an increase in content spending, projecting a substantial $17 billion investment in content for 2024.
