Netflix raises subscription prices as it adds 9 million sub…

Netflix on Wednesday disclosed summertime subscriber gains that surpassed industry analysts’ projections, signalling the video streaming service’s crackdown on password sharing is converting former freeloaders into paying customers. 

In an effort to bring in even more revenue, Netflix also announced it’s raising the price for its most expensive streaming service by $2 to $23 per month in the U.S. — a 10% increase — and its lowest-priced, ad-free streaming plan to $12 — another $2 bump. 

The $15.50 per month price for Netflix’s most popular streaming option in the U.S. will remain unchanged, as will a $7 monthly plan that includes intermittent commercials. It also raised its prices for subscribers in the U.K. and France.

The company added nearly 8.8 million worldwide subscribers during the July-September period, more than tripling the number gained during the same time last year when Netflix was scrambling to recover from a downturn in customers during the first half last year. 

The increase left Netflix with about 247 million worldwide subscribers, well above the 243.8 million projected by analysts surveyed by FactSet Research. Netflix’s financial performance also topped the analyst forecasts that shape investor expectations. The Los Gatos, California, company earned $1.68 billion, or $3.73 per share, a 20% increase from the same time last year while revenue climbed 8% to $8.54 billion. 

The company’s stock price soared more than 12% in extended trading after the latest quarterly numbers came out. Netflix shares have increased by about 30% so far this year amid mounting evidence its video streaming service is faring better than most in a crowded field of competitors that is testing the financial limits of many households.

Netflix has picked up more than 16 million subscribers through the first nine months of the year, already eclipsing the 8.9 million subscribers that it added all of last year. But it’s still a fraction of the more than 36 million additional subscribers that Netflix attracted in 2020 when the pandemic turned into a gold mine for the service at a time when people were looking for ways to stay entertained while tethered to home.

This year’s subscriber inroads have been made despite entertainment labour strife centred in part on writers’ and actors’ complaints about unfairly low payments doled out by video streaming services such as Netflix. 

The company has been able to withstand the recently settled writers’ strike and ongoing actors’ strike by drawing upon a backlog of already finished TV series and movies in the U.S., as well as productions made in international markets unaffected by the labour disputes.

In an apparent effort to rebuild its library of original programming after everyone returns to work, Netflix said it expects to spend about $17 billion on TV series and films next year. Netflix’s decision to abandon its long-established practice of allowing subscribers to share their account passwords with friends and family outside their households has prompted more viewers who had been watching the video service for free to sign up for their own accounts.