Netflix Raises Prices and Adds Subscribers Despite Strikes

Netflix Raises Prices and Adds Subscribers Despite Strikes – Netflix hiked subscription rates for select streaming plans in the United States, Britain, and France on Wednesday, coinciding with the company exceeding expectations in terms of new customer sign-ups. This surge in new subscribers, approximately 9 million globally during the third quarter, outpaced Wall Street analysts’ projections of 6 million, according to LSEG. 

Netflix anticipates a comparable number of new additions for the current quarter. This performance sent its shares soaring by 13%. Netflix’s robust performance underscores its resilience amid labor tensions in Hollywood that disrupted a significant portion of U.S. production. A substantial portion of Netflix’s new subscribers came from its overseas content, highlighting its ability to attract a global audience.

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Netflix cited the worldwide popularity of “One Piece,” a live-action adaptation of the beloved Japanese manga series, as a prime example of its substantial investment in storytelling that holds local significance while resonating with audiences worldwide. The streaming giant also attracted new audiences to long-running television shows, such as the legal drama “Suits,” which it licensed from Comcast (CMCSA.O), and HBO’s World War Two series “Band of Brothers.”

“These are the times I’m glad we have such a rich and deep and broad programming selection,” Netflix co-CEO Ted Sarandos said after the release of the quarterly results. “The same was true during COVID, when we were able to manage the slate through a prolonged and pretty unpredictable production interruption.” Hollywood’s film and television writers ratified a new contract this month, but actors remain on strike. Sarandos said Netflix was “totally committed to ending this strike.”

The company experienced its most significant quarterly increase in customers during the third quarter, marking its strongest growth since the second quarter of 2020 when the initial lockdowns due to the global pandemic resulted in an unprecedented surge in streaming subscriptions. Netflix raised the price of its premium ad-free plan in the United States by $3 per month, bringing it to $22.99. 

In Britain, the premium subscription price increased by 2 pounds to 17.99 pounds, and in France, it went up by 2 euros to 19.99 euros. Investors greeted the announcement with enthusiasm, propelling Netflix’s shares to $390.80 in after-hours trading, up from the closing price of $346.19. PP Foresight analyst Paolo Pescatore remarked that Netflix’s third-quarter expansion highlights its effective measures to combat password sharing and the promising prospects it has as it ventures into the advertising realm.

The price increases were disclosed in an earnings report, which also revealed that the company’s global subscriber count had reached 247 million by the end of September. Significant subscriber growth was particularly notable in Europe, the Middle East, and Africa, with Netflix adding nearly 4 million subscribers in this region. Currently, over 70% of its members are situated outside the United States.

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During the quarter, “Suits” achieved the remarkable feat of being the most-watched title in the U.S. across film, original TV, and acquired TV on streaming platforms for 12 consecutive weeks following its debut on Netflix. This series, which featured Meghan Markle, the wife of Prince Harry, originally aired on the USA cable network from 2011 to 2019. “As the competitive environment evolves, we may have increased opportunities to license more hit titles,” Netflix said in its quarterly letter to shareholders.

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