Netflix raises prices and gains subscribers amidst strikes
19 Oct 2023
Streaming giant Netflix has increased subscription prices for some plans in the U.S., Britain, and France. These new prices became active on Wednesday, 18 October, 2023, as they shattered expectations for new customers and grew their shares by 13%.
Netflix welcomed 9 million new subscribers globally in the third quarter of 2023. This figure had surpassed the Wall Street analysts’ forecast of 6 million new subscribers.
These strong numbers show that Netflix is thriving amid Hollywood labor tensions that have shut down a large number of U.S. productions. Netflix has a lot of its own shows and movies shot overseas, and they have been helping gain new customers.
The live-action adaptation of One Piece, which is already a popular anime, has helped Netflix grow its subscriber count and contribute to its global success. Some long-running TV shows, such as Suits and Band of Brothers, have also been attracting new subscribers.
"We are fortunate to possess such an extensive and diverse programming library during moments like these," remarked Ted Sarandos, co-CEO of Netflix, following the quarterly results release. "This was equally true during the COVID pandemic, enabling us to navigate an extended and highly unpredictable production disruption effectively."
Although Hollywood actors still remain on strike, film and television writers have confirmed new and improved contracts this month. Netflix co-CEO Ted Sarandos has reassured Netflix’s commitment to end the strike as soon as possible.
The third quarter of 2023 has shown the highest customer gains since the second quarter of 2020, which led to an exponential increase in subscriptions due to the COVID pandemic and lockdown.
In the U.S., Netflix has increased ad-free plan to $22.99 per month, up by $3. In Britain, the price rose by 2 pounds to 17.99 pounds and by 2 euros to 19.99 euros in France.
Paolo Pescatore, an analyst at PP Foresight, attributed Netflix's third-quarter growth to its recent measures against password sharing and the promising prospects in the realm of advertising as it expands. "Netflix is excelling on all fronts, with recent initiatives aligning perfectly with its objectives," he commented.
These new prices were announced in an earnings report that showed the company’s global subscriber count reached 247 million at the end of September.
Netflix had gained around 4 million new subscribers from Europe, the Middle East, and Africa. Almost 70% of the total subscribers to Netflix are from outside the United States.
The company reported strong revenue of $8.54 billion in the third quarter, with their shares selling at $3.73 per share.
Netflix has forecast revenue of $8.69 billion for the fourth quarter, which is below the forecasts of Wall Street analysts.
The writers and actors strike had forced Netflix to review their projection on content spending to $13 billion in 2023, which was initially projected at $17 billion.
According to Netflix, its supremacy in viewership persists. Netflix's content occupied 8% of television screen time, ranking second only to YouTube, as per data from Nielsen.
