Netflix witnessed a surge of 9 million subscribers in the third quarter, marking its most substantial growth in three years. The streaming giant, with a subscriber base of 247 million, outperformed Wall Street expectations, earning $3.75 per share, exceeding the projected $3.52.
To fortify its revenue stream, Netflix implemented price hikes. Basic US plans increased by $2 to $11.99, while premium subscriptions rose by $3 to $22.99. In the UK, basic subscribers will pay an extra £1, totaling £7.99, and premium subscriptions rose by £2 to £17.99. This strategic decision significantly boosted investor confidence, leading to a 12% spike in Netflix’s share prices.
The company attributed part of its success to older shows licensed from rival studios, capitalizing on their content after these studios launched their streaming platforms. Licensing agreements with HBO and NBCUniversal contributed to Netflix’s viewing records, notably the legal drama “Suits,” which amassed 1 billion viewing hours globally after being licensed to Netflix.
Despite facing industry challenges due to ongoing strikes in Hollywood, Netflix mitigated the impact by relying on internationally created content. Over 70% of their subscribers reside outside the United States, with a substantial 4 million new subscribers hailing from Europe, the Middle East, and Africa.
Netflix officials acknowledged a $1 billion reduction in new content investment due to strikes, expecting content spending to reach $13 billion in 2023. In anticipation of a resolution to the actors’ strike, Netflix anticipates a $17 billion content spending in 2024, showcasing its resilience amidst industry challenges.