Netflix is raising the prices of certain subscription plans, despite its successful crackdown on password sharing. The UK basic service’s monthly fee is increasing by £1 to £7.99, and the premium option is going up by £2 to £17.99. In the US, the premium plan will cost $3 more per month at $22.99 (£19.00), and in France, premium subscribers will pay an extra €2 at €19.99 (£17.40).
This price adjustment reflects Netflix’s growing confidence, as the company added 8.8 million subscribers from July to September, marking its most substantial increase in over two years. However, Netflix has been grappling with concerns about its ability to attract new members amid rising competition, climbing prices, and a Hollywood strike that has delayed new releases.
The recent subscriber growth was partially driven by charging an extra fee for households with multiple users on the same account, representing a strategy to maximize revenue from the existing subscriber base. The introduction of a cheaper plan with advertisements accounted for about 30% of sign-ups in countries where it was available.
Despite the uncertainties, Netflix believes it has a strong content library with a mix of original hits and licensed fan favorites to keep audiences engaged. The company highlighted the popularity of series like “Suits,” which gained significant viewership, even years after its initial release.
Netflix, known for emphasizing its original content, is also open to licensing more content as the competitive landscape evolves. Licensed material is expected to become increasingly important as Hollywood continues to grapple with strikes and production delays.
The company is pushing its advertising-funded plan, which it believes has significant profit potential, and this shift is one reason for the price increase on its “basic” ad-free plan. Netflix reported strong quarterly revenue and profits, positioning itself well in the streaming industry.
In the future, customers should anticipate further price increases as Netflix aims to protect its profits and manage costs related to licensing and new initiatives, such as the introduction of physical destinations for shopping, dining, and unique Netflix experiences. Netflix’s shares saw a significant increase in after-hours trading.
Conclusion:
Netflix has successfully implemented stricter rules to prevent password sharing, resulting in improved outcomes. However, despite this crackdown, the company continues to increase its prices in the UK and other regions.
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