Netflix has welcomed a whopping 9 million new subscribers in the third quarter, marking the most substantial increase in three years, attributed partly to its aggressive stance against paid password sharing. Seizing the momentum, the streaming giant announced tariff hikes, unveiling plans that stirred both investors and consumers alike.
For U.S. basic subscribers, the monthly bill will inch up by $2 to $11.99, while premium subscriptions will see a $3 rise, reaching $22.99. Across the pond, basic UK subscribers face a £1 increase, landing at £7.99, while premium subscriptions elevate by £2, reaching £17.99, as reported by the Financial Times. The market responded favorably, driving Netflix’s shares up by 12%.
These strategic moves come as Netflix grapples with slowing subscriber growth, prompting inventive countermeasures. Initiatives to combat password sharing are accompanied by plans for ad-supported options and new ad formats, including title sponsorships. Netflix’s third-quarter earnings, surpassing Wall Street expectations at $3.75 per share, coupled with its robust 11% increase in subscribers from the previous year, solidified its position.
Crucially, Netflix’s resilience amid Hollywood strikes is noteworthy. While industry challenges persist, Netflix’s global content approach, spanning regions where the strikes didn’t impact production, has cushioned the blow. Remarkably, 70% of Netflix’s subscribers reside outside the United States, with 4 million new European, Middle Eastern, and African subscribers fueling this quarter’s surge.
However, Netflix acknowledged the broader industry impact, revealing a $1 billion reduction in new content investment due to the strikes. Yet, undeterred, Netflix foresees a $13 billion content expenditure in 2023, with potential plans to scale up to $17 billion if the strike concludes, signaling Netflix’s unwavering commitment to content quality amidst industry challenges.