Netflix reported its third quarter earnings and things are going great right now for the streaming giant. The company added nearly 9 million subscribers globally, which means that revenue is up.
And yet, it also means that Netflix is using this opportunity to raise the prices of some of its plans in the U.S., the U.K. and France to differentiate ad-free plans from its entry-level ad supported plan. For instance, the most expensive plan will now cost $22.99 per month for new subscribers.
But let’s rewind first and look at Netflix’s current situation. In May, Netflix began its crackdown on password sharing in its home market and in dozens of global markets. In other words, we’re now seeing a clear picture of the effect of password sharing as the third quarter is the first full quarter under the new rules.
The company also streamlined its offering a couple of months ago by removing the basic tier in the U.S. and the U.K. People now have to pay quite a bit of money to remove ads from Netflix.
While reports suggest that many customers are facing subscription fatigue and are thinking about canceling some streaming subscriptions, it seems like Netflix still has a lot of room for growth — especially with advertising revenue.
The company now has 247.15 million subscribers. And that number jumped by 8.76 million subscribers this quarter alone. Netflix hasn’t seen that kind of growth in subscribers since Q2 of 2020, also known as the quarter of strict Covid lockdowns around the world.
When it comes to revenue, Netflix reported $8.5 billion this quarter with earnings of $3.73 per share. Ads are increasingly contributing to the bottom line as the number of subscribers on the ads plan is up almost 70% quarter-over-quarter. Nearly a third of new subscribers start with an ads plan.
This is good news for shareholders, which is why Netflix shares are currently up 13.75% in pre-market trading ($393.79 per share). But subscribers aren’t going to be happy as it means that the company is going to raise its prices for some of its plans once again in three key markets. Here is the full breakdown.
In the U.S.:
In the U.K.:
In France:
These new prices will apply to new subscriptions starting today. Existing subscribers will see the price hikes on their bills in the coming weeks.
Source @TechCrunch
