Netflix said in a letter to shareholders Wednesday it is raising the price of its basic and premium plans—changes announced after the streaming platform brought on 8.8 million subscribers in the latest quarter.
Netflix gained 8.8 million subscribers in its latest quarter. (Photo by Patrick T. FALLON / AFP) ... [+]
The premium plan—which offers Ultra HD streaming and allows more devices to be online at a time—will increase by $3 to $22.99 a month, while the basic plan—which is only available for existing subscribers—will go up by $2 to $11.99 a month.
The company said the price increases will start Wednesday in the U.S., U.K. and France, noting it will leave its $6.99 ad-supported plan and $15.49 standard ad-free plan unchanged.
Netflix told shareholders its $6.99 starting price in the U.S. was competitive with other streamers, which include Amazon Prime Video, Disney+ and Paramount+, all of which have basic plans spanning from $5.99 per month to $8.99 per month.
A planned increase was first revealed earlier this month, when the Wall Street Journal reported Netflix would raise the price of its ad-free service in the U.S. after the end of the SAG-AFTRA actors’ strike, which is ongoing after talks with Hollywood studios stalled.
$8.5 billion. That’s how much revenue Netflix brought in during the three-month period ending September 30, according to its earnings report Wednesday—matching analysts’ estimates.
Netflix’s stock closed down more than 2% Wednesday to $346.19 but skyrocketed up more than 12% in after-hours trading, reaching $388.63 per share at 5 p.m.
Netflix has 247.2 million subscribers—and added by 8.8 million net paid subscribers in the third quarter of this year. Netflix’s subscriber growth has benefited from its recent crackdown on password sharing and the addition of a cheap tier including ads. The company said in its second quarter earnings report it added nearly six million paid subscribers during the three months ending in June. Alongside the password crackdown, Netflix added a paid sharing option that required users to pay extra for accounts they share with others and was called a “primary revenue accelerator in the year” by its chief financial officer, Spencer Neumann. Netflix lost subscribers in the first two quarters of last year, its first subscriber losses in a decade, but reversed the declines and regained ground in the third quarter of 2022.
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