Video streaming giant Netflix is increasing the cost of its subscription plan once more. The streaming juggernaut shared its third quarter earnings report and disclosed price increases for its Basic Plan (USD 9.99 per month to USD 11.99 per month) and Premium Plan (USD 19.99 to USD 22.99 per month). With immediate effect, the USD 6.99 ad-supported plan and USD 15.49 Standard tier prices of Netflix will not change.
The United States, United Kingdom, and French markets will be impacted by Netflix’s most recent price increase. In the United Kingdom and France, the ad-supported and ‘Standard’ plans continue to be available at the same prices as the ‘Basic’ and ‘Premium’ Plans. Customers in France will pay 10.99 Euro for the Basic plan and 19.99 Euro for the Premium plan.
In the UK, the Basic and Premium plans will cost 7.99 Pound and 17.99 Pound, respectively.
According to Netflix, the price hikes will enable it to expand its catalogue of content, collaborate with the top producers, increase its investment in TV series, films, and video games, and grow its business.
Notably, Netflix last increased its prices in January 2022 and stopped providing new and returning customers with its USD 9.99 Basic ad-free plan in July, forcing them to pay extra to avoid advertisements.
“As we deliver more value to our members, we occasionally ask them to pay a bit more— Our starting price is extremely competitive with other streamers and at USD 6.99 per month in the US, for example, it’s much less than the average price of a single movie ticket,” Netflix writes in its letter to shareholders.
In the meantime, Netflix is making every household have its own plan as it cracks down on password sharing worldwide.
According to the company’s most recent reports, this crackdown is contributing to an increase in subscribers.
Along with outlawing password sharing, Netflix has formally launched its ‘paid sharing’ initiative in each of the regions in which it conducts business.
Netflix shares also catapulted higher in October after it reported far better Q3 earnings than anticipated.
The company’s earnings of USD 3.73 per share was well above the average analyst target of USD 3.49, while USD 8.54 billion in sales was in line with the market sentiment, and paid subscribers rose 8.76 million in the third quarter of 2023, a ratio which surpassed well above expectations for just over six million.
Wall Street biggies like KeyBanc, Morgan Stanley, Truist and DZ Bank have all upgraded the video streaming platform’s stock to buy-equivalent ratings, with KeyBanc citing the company’s ongoing success in paid sharing, its rising operating profit and free cash flow, and its estimate that share buybacks “should support a 25%+ EPS growth profile.”
Morgan Stanley remarked, “We believe Netflix will deliver the objectives it set out a year ago, accelerate revenue growth back to double digits and expand margins. At the same time, some of the froth in the stock and expectations have come out, creating a better entry point.”
And JPMorgan also hailed the company’s paid sharing strategy, as well as a “strong content slate” and Q4’s “favourable seasonality.”