Netflix shares suddenly increased by 12 percent after the company posted its Q3 earnings for 2023 as a result of the password-sharing crackdown initiative and the ad-supported tier.
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Netflix Beats Profit Expectations for Q3
The streaming giant saw a growth of 8.76 million global subscribers during this quarter, which is higher than the 5.49 prediction of Wall Street. The surge marked the biggest quarterly net add total of Netflix since the Q2 of 2022 when people were forced to stay at home due to COVID restrictions.
Netflix also unveiled its plans to focus on developing and improving its original and licensed titles in the global market. Netflix owed its success to shows like "One Piece", "The Witcher", "Sex Education", "Suits", and more. Meanwhile, the platform is also investing in creating foreign language shows such as "Dear Child" (Germany), "Sintonia" (Brazil), "Class Act" (France), and "Guns & Gulaabs" (India).
The company is optimistic that it will be able to achieve an 11 percent increase in revenue by the fourth quarter, which is around $8.69 billion and is below Wall Street's expectation of $8.77 billion. Meanwhile, the company is also looking forward to an operating margin of 22 percent to 23 percent for the full year 2024.
Netflix Pushes Price Hike Starting Next Week
Earlier this month, it was rumored that Netflix would increase the price of its services once the Hollywood strike ends. As part of the new deal with Hollywood's writers, the members of the Alliance of Motion Picture and Television Producers agreed to increase the wages and benefits based on the streaming popularity.
Based on the Q3 report, the company saw a 70 percent growth in the ads plan membership. According to Netflix, its ad tier pricing will remain at $6.99 per month in the U.S. The Standard plan also retains its $15.49 a month. However, the Basic plan will now cost $11.99 from $9.99 while the Premium plan will now be $22.99 per month from $19.99. Changes will implemented next Wednesday.
"A range of prices and plans to meet a wide range of needs, and as we deliver more value to our members, we occasionally ask them to pay a bit more," Netflix explained. Subscription prices for the U.K. and France were also adjusted.
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