Netflix raises prices as it adds 9 million subscribers
Written by Lisa Richwine and Dawn Chmielowski
LOS ANGELES (Reuters) – Netflix Inc raised subscription prices for some of its streaming plans in the United States, Britain and France on Wednesday, in a move aimed at boosting revenue in the competitive streaming market.
Netflix shares rose nearly 7% in after-hours trading to $369.89.
The ad-free premium plan, which allows four simultaneous streams, has increased by $3 per month to $22.99 in the US. The basic US single-stream plan rose by $2 per month to $11.99.
The price hike was announced in Netflix’s third-quarter earnings report, which showed the company added 9 million new customers worldwide and generated revenue of $8.542 billion, in line with analyst expectations. Earnings per share were $3.73. Wall Street had expected Netflix to attract about 6 million new customers.
Netflix expected fourth-quarter revenue of $8.69 billion to fall just below the $8.77 billion forecast of analysts polled by LSEG.
The company is looking for ways to increase revenues as it approaches market saturation in the United States and faces competition from Walt Disney, Warner Bros. Discovery and others.
In Britain, the price of the basic plan rose by one pound to 7.99 pounds. In France, the base price rose by 2 euros to 10.99 euros.
The company also launched a cheaper category through advertising and began asking password borrowers to pay as it pursued growth.
Executives said they are still in the early stages of building an ad-supported business. Netflix replaced its advertising chief earlier this month.
Media companies like Netflix are grappling with labor tensions in Hollywood. While film and television actors have ratified a new contract, actors are still on strike.
The shutdown has halted Netflix productions like Stranger Things. However, the company says it has been able to weather strikes better than competitors because many of its productions take place outside the United States.
Netflix said it continued to dominate viewership even with strikes with shows like “One Piece.” Netflix programming represents 8% of TV screen time, second only to YouTube, the company said, citing Nielsen data.
Some analysts recently lowered their price targets for Netflix. The average target fell to $460 from $495 a month ago, according to Refinitiv.
(Reporting by Lisa Richwine; Editing by Aurora Ellis)