Netflix Reports Subscriber Growth, Announces Price Hikes

The Netflix logo is displayed at the entrance to Netflix Albuquerque Studios film and television production studio lot in Albuquerque, N.M., on Oct.13, 2023. (Patrick T. Fallon/AFP via Getty Images)

Many are losing in the streaming wars, but not Netflix. Shares in the streaming giant experienced a surge of more than 12 percent in after-hours trading as it outperformed profit expectations while reporting a 9 percent increase in average paid memberships compared with the same period last year. And now the streaming giant is hiking its prices again.

On Oct. 18, Netflix raised its ad-free premium plan in the United States from $19.99 to $22.99. Users on this plan can enjoy Ultra HD content on compatible devices and download on up to six supported devices simultaneously. The price of the basic plan, which doesn’t include advertising, rose from $9.99 to $11.99. The monthly cost of all other plans, including the $6.99-per-month ad-supported tier, remains unchanged.

Netflix’s previous price hike in the United States was in January 2022.

The leading stream service disclosed plans to raise prices for certain subscription tiers in the UK and France. While the pricing for the ad and standard plans remains the same in the UK and France, the basic plan is set to rise to 7.99 pounds and 10.99 euros, respectively. The premium plan will increase to 17.99 pounds and 19.99 euros, respectively.

Netflix subscribers in other nations will also experience price hikes.

According to Netflix’s third-quarter report, the streaming giant added 8.76 million customers in the third quarter, bringing its total subscriber base to 247.2 million. In its most recent shareholder letter, the company noted that subscriptions to the ad-tier plan have experienced a 70 percent sequential increase. The company attributed its increase in subscriber counts to its crackdown on password sharing, which resulted in a surge of users purchasing their own subscriptions.

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In terms of financials, Netflix predicts earnings per share of $2.15 and revenue of about $8.69 billion for the fourth quarter.

Despite Strikes, Netflix Thrives

Netflix’s performance shows that the streaming king is on a roll, even in the face of the three-month strike that disrupted a large part of Hollywood production and film releases in recent months.

“The last six months have been challenging for our industry given the combined writers and actors strikes in the US,” Netflix said in its statement to shareholders.

“While we have reached an agreement with the WGA, negotiations with SAG-AFTRA are ongoing. We’re committed to resolving the remaining issues as quickly as possible so everyone can return to work making movies and TV shows that audiences will love.”

Writers on strike march with signs on the picket line on day four of the strike by the Writers Guild of America in front of Netflix in Hollywood, Calif., on May 5, 2023. (Frederic J. Brown/AFP via Getty Images)

Many Streaming Operators Lose Money

The future of TV isn’t a lucrative market for everyone.

In recent years, content spending in the media industry has soared, with companies pouring billions of dollars into creating new shows and films to entice and retain subscribers. Although Netflix is thriving, some big spenders are losing both money and customers in the direct-to-consumer streaming race.

In the second quarter, Warner Bros. Discovery reported a decline of 1.8 million subscribers across its streaming ecosystem, including Discovery+ and Max, formerly HBO Max. The decrease in subscriber numbers can be at least partly attributed to customers streamlining their accounts, resulting in the cancellation of duplicate subscriptions, such as Max and Discovery+.

The Walt Disney Company, one of the biggest spenders in the streaming world, also acknowledged a decline in operating income, reduced advertising revenues, and a drop in subscribers during its fiscal second quarter. This was partly due to the loss of Indian Premier League cricket match rights by its India-based Hotstar video platform.