Netflix 4K Subscription Plan Price Increase in Select Countries
LOS ANGELES: Netflix raised subscription prices for some streaming plans on Wednesday in the United States, Britain and France as it beat expectations for new customers and boosted its share by 13 percent.
According to LSEG, Netflix added nearly 9 million subscribers worldwide in the third quarter, beating Wall Street analysts’ forecast of 6 million. Netflix said it expects the same number of additions in the current quarter.
The strong performance showed that Netflix was thriving despite labor tensions in Hollywood that shut down much of its US production. Netflix makes many of its shows and movies overseas, which accounted for the majority of its new sign-ups.
Netflix cited the global success of “One Piece.” It’s a live-action adaptation of a venerable Japanese manga series and an example of its heavy investment in stories that have local resonance and travel around the world. The streaming giant also attracted new audiences to long-running television shows such as the legal drama “Suits,” which it licensed from Comcast, and HBO’s World War II series “Band of Brothers.”
“In these times, I’m delighted that we have such a rich, deep and broad selection of programming,” Netflix CEO Ted Sarandos said after announcing quarterly results. “The same was true in the COVID situation, where we were able to manage the shale through a prolonged and rather unpredictable production outage.”
Hollywood’s film and television writers ratified a new contract this month, but actors are still on strike. Sarandos said Netflix is “absolutely committed to ending this strike.”
The company’s third-quarter customer revenue represented its strongest quarterly increase since the second quarter of 2020, when lockdowns during the global pandemic led to unprecedented growth in streaming subscriptions.
Netflix raised the price of its premium ad-free plan in the US by $3 per month to $22.99. The premium price rose by two pounds to 17.99 pounds in Great Britain and by 2 euros to 19.99 euros in France.
Investors welcomed the news, and Netflix shares rose to $390.80 in extended trading from a close of $346.19.
PP Foresight analyst Paolo Pescatore said Netflix’s third-quarter growth was a sign of its recent crackdown on password sharing and growth opportunities as it moves into advertising.
“It’s firing on all cylinders, and the recent efforts are going in the right direction,” he said.
GLOBAL PROFIT
The increase in prices was reported in the results report, which showed that the company’s worldwide number of subscribers was 247 million at the end of September.
The number of subscribers grew significantly in Europe, the Middle East and Africa, where Netflix added almost 4 million subscribers. More than 70 percent of its members now live outside the United States.
During the quarter, “Suits” was the most-watched title across movies, original TV and purchased TV in the US for the 12 weeks after arriving on Netflix. The series, starring Prince Harry’s wife Meghan Markle, originally aired on the US cable network from 2011 to 2019.
“As the competitive environment evolves, we may have increased opportunities to license more hits,” Netflix said in its quarterly letter to shareholders.
The company’s turnover was 8.54 billion dollars, in line with analysts’ forecasts. Earnings per share were $3.73, ahead of Wall Street’s expectation of $3.49.
Netflix’s forecast for fourth-quarter revenue of $8.69 billion was slightly lower than analysts’ estimate of $8.77 billion.
The writer and actor strikes prompted Netflix to revise its projections for content spending to $13 billion in 2023, assuming the studios will reach a settlement with the striking cast “in the near future.”
That was less than the $17 billion it expected to spend.
Netflix said it still dominated viewers. Netflix shows accounted for 8 percent of TV viewing time, second only to YouTube, the company said, citing Nielsen data.
