Netflix has started raising its rates in some countries, taking into account the drop in growth following the password sharing crackdown. The film and TV streaming giant has already raised subscription fees in parts of Japan, Europe, the Middle East, and Africa last month. These changes are now being implemented in Italy and Spain.
The netcom company announced that it added 5.1 million new subscribers between July and September, which was more than expected, but a smaller increase than last year. In 2022, Netflix first signaled that its expansion was being limited, so it cracked down on password sharing and introduced a new streaming option with ads. This policy to stop password sharing led to a wave of new subscribers, and the company gained more than 45 million new subscribers.
Today, Netflix has 282 million subscribers globally. According to experts, Netflix can get huge financial benefits through advertising in the future. However, for now, Netflix has said that a major share of revenue from the advertising segment is not expected until next year.
Netflix has the lowest cost plans with advertising options. In countries where these schemes are available, 50% of new subscribers have taken up the scheme. In addition, revenue for the July-September period was up 15% year-on-year to $9.8 billion (£7.5 billion), without any special advertising support. During the same period, the profit of the company increased from $1.6 billion to $2.3 billion.
The company raised the prices of some plans in the UK and US in 2023, but the prices of its popular plans (which are without advertising) called “Standard Plans” have remained unchanged since 2022. Netflix has previously tested the price changes in smaller countries and then implemented them in major markets such as the UK and the US.
Netflix’s current good financial position gives the company the opportunity to spend money on producing new hits. Meanwhile, according to senior equity analyst Matt Britzman, these new hits are the reason why the company won’t face any resistance in raising membership fees. “It’s a volatile market in which consumers can easily switch to another streaming service if they don’t find Netflix worthwhile,” he said.
“Sports tournaments and other new content can be critical to the company’s future,” Britzman said. “New and fresh content is what gives Netflix the opportunity to bring back subscribers, which will help retain customers despite rate hikes.”
Meanwhile, Netflix’s drama “Baby Reindeer” has also achieved success. The play was created by and starred Scottish comedian Richard Gadd.