Netflix has raised its subscription prices, aiming to counterbalance the challenge posed by rampant password sharing. In the third quarter alone, the streaming giant welcomed a remarkable 9 million new subscribers, totaling 247 million users by the quarter’s end, marking an 11% increase from the previous year.
To tackle the impact of password sharing, basic subscribers in the U.S. will witness a $2 hike, bringing the monthly bill to $11.99, while premium subscriptions will rise by $3, reaching $22.99. In the UK, basic subscribers will pay an additional £1, amounting to £7.99, and premium subscriptions will elevate by £2, reaching £17.99. These pricing adjustments, typically favorably received by investors, led to a 12% boost in Netflix’s share price.
Amid this growth, Netflix navigated challenges posed by ongoing strikes in Hollywood, impacting content creation. The streaming service, however, found solace in its international content, with nearly half of its 9 million new subscribers located in Europe, the Middle East, and Africa. Approximately 70% of Netflix’s subscribers reside outside the United States, contributing to its resilient expansion despite regional industry challenges.
Despite a $1 billion reduction in content investment due to the strikes, Netflix remains optimistic, projecting a content spending of about $13 billion in 2023. If the ongoing industry challenges find resolution, the company anticipates a content expenditure of approximately $17 billion in 2024.
This bold stride, marked by both increased subscribers and a strategic pricing shift, underscores Netflix’s commitment to adapting to industry dynamics while continuing to provide an expansive and engaging streaming experience for its global audience.
