Netflix has announced another round of price increases. The streaming giant revealed on Wednesday that some subscribers in the US, UK and France will face a new round of price increases, with the new changes affecting anyone with a “basic” or “premium” subscription.
Also read: Netflix plans price hike amidst Post-Strike reforms
Basic no longer an option for newcomers
The “Basic” package, the lowest ad-free package Netflix has to offer, will no longer be available to new members. In the United States, users will pay $9.99 per month for a subscription, but that will increase to $11.99 in the future.
“Premium” packages saw even bigger increases. This tier, which allows users to watch ultra HD streaming as well as downloads on up to six devices, will increase in price from $19.99 to $22.99 per month.
“As we deliver more value to our members, we occasionally ask them to pay a bit more,” Netflix said while announcing third-quarter earnings results. “Our starting price is extremely competitive with other streamers and at $6.99 per month in the US, for example, it’s much less than the average price of a single movie ticket.”
Sad customers, happy investors
The move shattered expectations for new customers, and investors welcomed the news, sending the company’s shares soaring 13 percent.
Nearly 9 million subscribers joined Netflix worldwide in the third quarter, beating the 6 million predicted by Wall Street analysts.
Meanwhile, the company’s third-quarter revenue of $8.54 billion was in line with analysts’ forecasts. Earnings per share came in at $3.73, above Wall Street expectations of $3.49. Fourth-quarter revenue is expected to be $8.69 billion, slightly below analyst expectations of $8.77 billion.
Netflix set for more growth
The company’s customer growth in the third quarter was its strongest quarterly growth since the second quarter of 2020. PP Foresight analyst Paolo Pescatore said Netflix’s growth in the third quarter is a testament to its recent crackdown on password sharing and growth opportunities as it moves into advertising.
Netflix’s global subscriber base reached 247 million at the end of September. Europe, the Middle East and Africa saw significant subscriber growth, with Netflix adding nearly 4 million subscribers in those regions.
Currently, more than 70 percent of its subscribers live outside the United States. The strong performance shows that Netflix is thriving despite labor tensions in Hollywood that have halted most production projects in the United States. Many of Netflix’s shows and movies are produced overseas, which accounts for most of its new sign-ups.
