Netflix investors are reacting positively after the company’s latest earnings results, but subscribers don’t have much to crow about. That’s because while the streaming giant saw its stock price soar in premarket trading this morning, the prices of some Netflix plans are going up again, too.
First, the good news for investors: Netflix added 8.8 million paid subscribers in Q3 2023. That’s nearly four times more than the company added in the same quarter a year earlier and more than the 5.5 million that Wall Street was expecting. As CNBC notes, it’s also the most quarterly subscribers that Netflix has gained since Q2 2020, which is when lockdowns had people clamoring for in-home entertainment.
Though Netflix didn’t directly mention its password-sharing crackdown in its shareholders’ letter, it cited its “paid sharing” add-on, which allows Netflix subscribers to add non-household members to their subscription for an additional cost, as one of the key drivers for its growth.
And what about all the people who said they would cancel Netflix once the crackdown started? “The cancel reaction continues to be low, exceeding our expectations, and borrower households converting into full paying memberships are demonstrating healthy retention,” Netflix said to investors. “As a result, we’re revenue positive in every region when accounting for additional spin off accounts and extra members, churn and changes to our plan mix.”
Now, the bad news for subscribers: Netflix is raising rates on some ad-free plans again. In the United States, the company’s ad-supported and standard plans will remain at $6.99 and $15.49, respectively. But the company’s basic plan will rise by $2 to $11.99 a month and its premium plan will rise by $3 to $22.99 a month.
Keep in mind that Netflix only offers one plan with 4K video streaming—the premium plan. So, if you want Netflix in 4K you now need to fork out $23 a month for it.
Netflix is clearly feeling emboldened by the success of its password-sharing crackdown, but it will be interesting to see how its subscribers react to these new price increases. As for Netflix investors, we know how they are reacting. As of the time of this writing, Netflix (NFLX) shares are up over 13% to $392.50 in premarket trading.
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