In a strategic move after gaining a massive 9 million new subscribers in the third quarter, Netflix has raised subscription prices, signaling the streaming giant’s response to the surge in its user base, largely fueled by its ongoing battle against password sharing.
In the U.S., basic subscribers will witness a $2 increase, now priced at $11.99 monthly, while premium subscriptions jump by $3, reaching $22.99. For UK users, the basic plan sees a £1 rise, standing at £7.99, and premium subscriptions rise by £2 to £17.99. These hikes, typically celebrated by investors, significantly elevated Netflix’s share price by 12%.
This subscriber surge pushed Netflix’s third-quarter earnings to $3.75 per share, surpassing Wall Street’s predictions of $3.52. With 247 million subscribers by the quarter’s end, marking an 11% increase from the previous year, Netflix’s innovative strategies, including efforts to combat password sharing, contributed to this stellar performance.
Netflix’s recent successes were amplified by its licensing agreements for older shows, such as the acclaimed series ‘Suits,’ which broke records after being licensed to Netflix by NBCUniversal, accumulating a billion viewing hours globally. These wins helped Netflix withstand industry challenges, especially in the face of recent strikes in Hollywood. The company acknowledged the industry’s struggles but noted that Netflix’s international content production alleviated the impact, with over 70% of its subscribers residing outside the U.S.
Despite the hurdles, Netflix’s content spending is projected to reach about $13 billion in 2023, with an optimistic outlook for 2024, where it aims to invest around $17 billion in content if ongoing industry challenges, notably the actors’ strike, find resolution in the near future.