Netflix
Netflix is starting to raise its prices in some countries as growth spurred by a crackdown on password sharing begins to fade.
The company told investors on Thursday that it was “working to improve our monetization by refining our plans and pricing” and had already increased prices over the past month.
In Italy and Spain, hikes will begin this week.
This update comes as the streaming giant announced that it added 5.1 million subscribers in the three months ended in September – the smallest number in over a year.
Netflix is under pressure to show investors what will fuel growth in the years to come, as its already massive reach makes it harder to find new subscribers.
The last time the company saw signs of a slowdown, in 2022, it launched a crackdown on password sharing and announced it would offer a new streaming option with ads.
The crackdown sparked a new wave of growth.
The company has welcomed more than 45 million new members since its inception last year. She now has more than 282 million subscribers worldwide.
Analysts also expect ads to eventually become big business for Netflix.
For now, however, the company said it was still in its “early stages” and told investors not to expect it to start generating growth until next year, although many subscribers opted for the ad-supported plan.
The plan, which is the company's cheapest option, accounted for 50% of new signups in countries where it is offered in the most recent quarter, Netflix said.
Netflix
Even without the advertising boost, Netflix said its revenue in the July-September period was up 15% from the same period last year, to more than $9.8 billion. It also reported a profit of more than $2.3 billion.
Shares were up about 4% after hours.
Netflix last raised its prices in the UK and US last year, but the moves only affected certain plans. It has left the price of its popular “standard plan” unchanged without advertising since 2022.
In the past, the company has sometimes experimented with tariffs in smaller countries before making changes in major markets, like the United States and the United Kingdom.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said Netflix's strong financial position would allow it to continue spending money to achieve new successes – key if it hopes to raise prices without a backlash.
“It's inherently a volatile market, where consumers are happy to trade in their streamers if they don't think they'll make a profit from them,” he said.
“Adding new content is key to this, especially in areas like sporting events, and could give Netflix the edge it needs to raise prices and keep customers coming back for more .”
