Netflix Boosts Pricing – Attracting New Users, Despite Ongoing Strikes
Date : 19th October, 2023
On Wednesday, Netflix (NFLX.O) exceeded expectations for new subscribers, which caused its stock to surge 13%. It increased the membership costs for several streaming options in the US, UK, and France as a result.
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Netflix adds 9 Million New Members Worldwide Surpassing 6 Million on Wall Street
In the third quarter, Netflix added almost 9 million new members worldwide, surpassing the 6 million analysts on Wall Street had projected. Netflix said it expects a similar amount of adds for the current quarter.
The astounding result implied that Netflix was succeeding despite the labour strife in Hollywood that shut down the majority of American production. The majority of new Netflix subscribers are from nations where the streaming service produces a large portion of its TV shows and films.
Netflix noted the success of “One Piece,” a live-action adaptation of the well-known Japanese manga series, as proof of its substantial investment in internationally resonant stories with local relevance. Long-running television shows like HBO’s World War II series “Band of Brothers” and the courtroom drama “Suits,” which it leased from Comcast (CMCSA.O), also attracted new viewers thanks to the behemoth of streaming services.
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Netflix Pledges to End The Strike
Co-CEO Ted Sarandos of Netflix said, “I’m happy we have such a rich, extensive, and varied selection of programming during these times,” after the company’s quarterly results were revealed. “The same was true during COVID, when we were able to manage the slate through a prolonged and pretty unpredictable production interruption.”
Hollywood screenwriters for motion pictures and television approved a new deal this month, but actors are still on strike. As Sarandos puts it, Netflix is “totally committed to ending this strike.”
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Netflix's Premium Ad-free Plan now Costs $22.99, a $3 Monthly Increase in the USA
The company’s increase in customers during the third quarter was its biggest since the second quarter of 2020, when early-stage lockdowns during the global pandemic caused an unheard-of spike in streaming subscriptions.
In the US, Netflix’s premium ad-free plan now costs $22.99, a $3 monthly increase. The price of the premium went up to 17.99 pounds in Britain and 19.99 euros (two pounds) in France.
Netflix Shares Surged from a Close of $346.19 to $390.80
With the announcement well received by investors, Netflix shares surged from a close of $346.19 to $390.80 in extended trading.
According to Paolo Pescatore, an analyst at PP Foresight, Netflix’s third-quarter profit is a testament to both the company’s recent attempts to limit password sharing and the growth potential that comes with its entry into advertising.
When “Suits” first came available on Netflix, it dominated the American film, original TV, and paid TV streaming charts for 12 straight weeks of the quarter. Meghan Markle, the wife of Prince Harry, starred in the series, which ran on the USA cable network from 2011 to 2019.
The Company's Revenue to be $8.54 Billion
According to analyst estimates, the company’s revenue was $8.54 billion. In contrast to Wall Street’s prediction of $3.49, earnings per share came in at $3.73.
Netflix reported $8.69 billion in revenue for the fourth quarter, slightly less than the $8.77 billion experts had projected.
Due to the writer and actor strikes, Netflix updated its forecasts for content spending to $13 billion in 2023, assuming that the studios reach a settlement with the striking actors “in the near future.”