8.8 million people across the world joined the streaming giant between July and September, latest numbers reveal.
Netflix disclosed summertime subscriber gains on Wednesday that surpassed industry analysts’ projections, signalling the video streaming service’s ban on password sharing is converting former freeloaders into paying customers.
In an effort to bring in even more revenue, the streaming giant also announced it is increasing the prices of two of its subscription plans in the UK, the US and France.
For Netflix’s most expensive service, the price will go up to £17.99 (€20.65) per month in the UK and to $23 (€21.82) in the US. Its ad-free lowest-priced streaming option will now cost £7.99 in the UK and $12 in the US.
The monthly prices for the ad-supported and the standard plans will remain unchanged in the three countries.
The company added nearly 8.8 million subscribers worldwide between July and September, more than tripling the number gained during the same period last year.
The increase took Netflix to about 247 million users across the world, well above the 243.8 million projected by experts surveyed by US business data firm FactSet Research.
Netflix’s financial performance also topped the analyst forecasts that shape investor expectations. In the third quarter of the year, the company earned $3.73 per share, a 20% increase compared to the same time last year. Revenue climbed 8% to $8.54 billion.
The stock price soared more than 12% in extended trading after the latest numbers came out on Wednesday.
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 testing the financial limits of many households.
The company has picked up more than 16 million subscribers since the beginning of the year, having already eclipsed the 8.9 million users that it added all of last year.
However, it still is 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.
In France, the basic and premium plans increased to €10.99 and €19.99, respectively.
Ad-supported plan expected to grow
This year’s subscriber surge has occurred despite the entertainment labour strife in Hollywood, in part centred on writers’ and actors’ complaints about unfairly low payments doled out by video streaming services such as Netflix.
The Californian company has been able to withstand the recently settled writers’ strike and the ongoing actors’ strike by drawing upon a backlog of already finished TV series and movies in the US, as well as productions made in international markets unaffected by the American labour disputes.
In a shareholder letter, Netflix said roughly 30% of its incoming subscribers are opting for the plan with commercials – the cheapest one – which is likely to attract more spending from advertisers.
The higher prices for Netflix’s premium service also seem likely to divert more users into the ad-supported option.
“The ‘streamflation’ era is upon us. Consumers should expect to be hit with price hikes and password sharing limits, and to be enticed with ad-supported options,” said US media leader for KPMG Scott Purdy.
