The group signed up 8.76 million new subscribers in the third quarter after ending shared accounts and increased its net profit by 20%
Limiting shared passwords works for Netflix. The leading streaming platform added 8.76 million new subscribers in the third quarter of the year, beating analysts’ expectations. The group now has a record 247.15 million paying subscribers worldwide, 10.8% more than a year ago, and is also benefiting from increased usage of the ad-supported service. After the success of this measure, Netflix is now determined to increase the cost of subscription. The first increase, announced on Wednesday during the company’s quarterly results presentation, will affect the United States, the United Kingdom and France.
Netflix achieved a record revenue of $8.5 billion in the third quarter of the year, 7.8% more than the same period last year, according to data released on Wednesday. Net income rose 20% to $1.68 billion.
The increase in the subscribers of the platform it is the largest since the second quarter of 2020, which took place amid the Covid-19 pandemic. After a few years of sluggish growth, the company adopted a dual growth strategy that coincided with a change at the top of the company. On the one hand, it put an end to the use of joint accounts between members of different households who paid for a single subscription. And on the other hand, it launched a low-cost, ad-supported service. Both measures have worked and allowed Netflix to stand out in a crowded market while its competitors struggle… The company explained that 30% of new subscribers opted for the ad-supported service, which is available in a dozen countries.
In countries where it took steps to prevent the use of shared passwords, the number of subscription cancellations was lower than the company expected. In addition, many of the households that used shared passwords are signing up. Netflix claimed that more than 100 million households share accounts.
The company believes subscriber loyalty is strong enough to raise prices. In the United States, the ad-supported ($6.99) and standard ($15.49) plans remain the same, but the price of the basic plan will increase to $11.99, while the premium will jump to $22 .99 dollars. In the UK and France, the first two packages also remain the same (£4.99 and £10.99 respectively in the UK and €5.99 and €13.49 in France), but the basic service will increase (to 7 .99 pounds and 10.99 euros), along with the premium (17.99 pounds and 19.99 euros).
In its letter to shareholders, Netflix also addressed how the actor and writer strikes affected the entertainment industry. “The past six months have been difficult for our industry, given the combined writer and actor strikes in the US. While we have reached an agreement with the WGA, negotiations with SAG-AFTRA are ongoing. We’re committed to resolving the remaining issues as soon as possible so everyone can get back to work and make movies and TV series that audiences will love“, refers.
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