In a strategic move following a surge of 9 million new subscribers in the third quarter, Netflix has increased its subscription prices, aiming to bolster revenues and curb password sharing. For U.S. basic subscribers, the monthly fee rose by $2 to $11.99, while premium plans increased by $3 to $22.99. In the UK, basic subscribers saw a £1 increase to £7.99, and premium subscriptions rose by £2 to £17.99. These changes, welcomed by investors, lifted Netflix’s shares by 12%.
Netflix’s Q3 earnings of $3.75 per share surpassed Wall Street expectations, driven by 247 million subscribers, an 11% increase from the previous year. To counter slowed subscriber growth, Netflix initiated measures against password sharing and introduced ad-supported plans. Licensing older shows from rival studios bolstered their catalog, compensating for content loss due to studios launching independent streaming services.
While Hollywood strikes impacted the industry, Netflix’s global focus, especially in Europe, the Middle East, and Africa, shielded it from significant disruptions. Despite a $1 billion reduction in content investment due to the strikes, Netflix plans to allocate around $13 billion in content spending for 2023. If the strike concludes soon, Netflix anticipates investing approximately $17 billion in content for 2024, emphasizing its resilience amidst industry challenges.