[1/2]The Netflix logo is seen on one of their Hollywood buildings in Los Angeles, California, USA, July 12, 2023. Portal/Mike Blake/File Photo Acquires License Rights
LOS ANGELES, Oct 18 (Portal) – Netflix (NFLX.O) raised subscription prices for some streaming plans in the United States, Britain and France on Wednesday as it dashed expectations for new customers, sending its shares up 13% skyrocketed.
According to LSEG, nearly 9 million subscribers signed up for Netflix worldwide in the third quarter, surpassing Wall Street analysts’ forecast of 6 million. Netflix said it expects a similar number of new additions for the current quarter.
The strong performance showed that Netflix was thriving despite labor disputes in Hollywood that shut down much U.S. production. Netflix produces many of its series and films abroad, which accounted for the majority of its new registrations.
Netflix pointed to the global success of “One Piece,” a live-action adaptation of the venerable Japanese manga series and an example of the company’s heavy investment in stories with local resonance that travel the world. The streaming giant also attracted new viewers with long-running television shows, such as Comcast’s (CMCSA.O)-licensed legal drama “Suits” and HBO’s World War II series “Band of Brothers.”
“These are the times when I’m glad we have such a rich, deep and broad programming offering,” Netflix co-CEO Ted Sarandos said after the quarterly earnings release. “The same was true during the COVID-19 period, when we were able to manage the situation despite a prolonged and fairly unpredictable production shutdown.”
Hollywood’s film and television writers ratified a new contract this month, but actors continue to strike. Sarandos said Netflix was “fully committed to ending this strike.”
The company’s third-quarter subscriber gains represented its strongest quarterly increase since the second quarter of 2020, when lockdowns at the start of the global pandemic led to an unprecedented surge in streaming subscriptions.
Netflix increased the US price of its ad-free Premium plan by $3 per month to $22.99. The cost of the premium rose by 2 pounds to 17.99 pounds in the UK and by 2 euros to 19.99 euros in France.
Investors welcomed the news, sending Netflix shares up to $390.80 from a closing price of $346.19 in extended trading.
Paolo Pescatore, an analyst at PP Foresight, said Netflix’s third-quarter growth was evidence of its recent crackdown on password sharing and the growth opportunities in entering advertising.
“It’s in full swing, the latest efforts are all going in the right direction,” he said.
GLOBAL PROFITS
The price increases were announced in an earnings report that showed the company’s global subscriber base reached 247 million at the end of September.
Significant subscriber growth occurred in Europe, the Middle East and Africa, where Netflix added nearly 4 million subscribers. More than 70% of members now live outside the United States.
During the quarter, “Suits” became the most-watched film, original TV and Acquire TV streaming title in the U.S. for 12 weeks after appearing on Netflix. The series, starring Prince Harry’s wife Meghan Markle, originally aired on the US cable network from 2011 to 2019.
“As the competitive environment continues to evolve, we may have more opportunities to license additional hit titles,” Netflix said in its quarterly letter to shareholders.
The company posted revenue of $8.54 billion, in line with analyst forecasts. Earnings came in at $3.73 per share, above Wall Street’s expectation of $3.49.
Netflix’s fourth-quarter forecast for revenue of $8.69 billion was slightly below analyst estimates of $8.77 billion.
The writers and actors’ strikes prompted Netflix to revise its 2023 content spending forecasts to $13 billion, assuming studios will reach an agreement with the striking actors “in the near future.”
That was less than expected spending of $17 billion.
Netflix said it continued to dominate viewership. Netflix programs accounted for 8% of viewing time, second only to YouTube, the company said, citing Nielsen data.
Reporting by Lisa Richwine; Edited by Aurora Ellis, Bill Berkrot and Leslie Adler
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