Netflix, the popular video streaming service, is raising prices for some of its customers following strong subscriber growth. The company reported that it added 8.8 million customers in the third quarter, bringing its total subscriber count to 247.2 million. Netflix attributed its increased reach to the variety and quality of its programming as well as its efforts to crack down on password sharing.
Starting immediately, Netflix is increasing the monthly price of its most expensive plan in the U.S. to $22.99, a $3 increase. The basic plan will also see a $2 increase, bringing it up to $11.99 per month. However, the $6.99 ad-supported plan will remain the same. Similar increases are also being implemented for the basic and premium plans in France and the U.K.
In a letter to shareholders, Netflix explained that as they provide more value to their members, they occasionally ask for a bit more payment. The company stated that their starting price is competitive with other streaming services and is much lower than the average price of a single movie ticket.
This news comes after the Wall Street Journal previously reported that Netflix would raise subscription prices after the Hollywood actors strike concludes. While the actors are still on strike, the Writers Guild of America recently ended their walkout after reaching an agreement with services like Netflix.
Financially, Netflix is performing well, reporting third-quarter earnings of $1.68 billion, a 20% increase compared to the same period last year. The company also forecasted revenue of $8.69 billion for the current quarter, demonstrating its financial stability as other newer streaming services struggle. Following the announcement of the price increase, shares of Netflix jumped 12% in after-hours trading.
In terms of subscriber growth, Netflix has added over 16 million subscribers in the first nine months of this year, surpassing the 8.9 million subscribers it gained in all of 2022. However, this number is significantly lower than the additional 36 million subscribers that Netflix acquired in 2020 during the COVID-19 pandemic when people were seeking entertainment options while staying at home.
In summary, Netflix’s decision to raise prices for certain plans reflects its continued success in attracting new subscribers and providing high-quality content. While some customers may be unhappy with the increases, the company’s solid financial performance and growing subscriber base indicate that it remains a dominant player in the streaming industry.