Netflix to hike prices on the back of subscriber surge
The streaming giant added nearly 8.8 million subscribers in the third quarter globally. It clocked $8.54 billion in revenue, at an increase of nearly 8% from the same quarter last year, slightly beating analyst estimates.
Streaming giant added nearly 8.8 million subscribers in the third quarter globally, surpassing Wall Street estimates, which pegged the number at about 6 million. This takes its overall subscriber base to 247.2 million.
Buoyed by the rise in subscribers, the company said it will increase subscription prices in a few regions, including the United States, Britain, and France.
The streaming giant made $8.54 billion in revenue in the third quarter marking an increase of nearly 8% from the same quarter last year when it made $7.92 billion, slightly beating analyst estimates. It also recorded an operating income of $1.96 billion compared to $1.53 billion during the same quarter last year.
While investors were concerned that the subscriber base could shrink with the implementation of the ban on password sharing, Netflix has managed to add subscribers. According to a report by Bloomberg the company is now on track to add about 20 million customers this year, compared to just 9 million last year.
Apart from subscriber numbers, ads continue to be a growth driver for the company.
"Adoption of our ads plan continues to grow—with ads plan membership up almost 70% quarter-over-quarter—and 30% of sign-ups in our ads countries are, on average, to our ads plan, with more work to do to scale this business," Netflix said in a letter to shareholders.
The company revealed that a chunk of its viewership is outside the United States and also credited "strong programming" for its growth.
"Over 70% of our members are now outside the US and we offer more and more great, authentic, local stories to further satisfy them and grow engagement in these regions," it said.
The company added nearly 4 million users from Europe, the Middle East, and Africa this quarter.
Meanwhile, Netflix is facing the ire of writers who are currently on an industry-wide strike demanding better compensation. The company said it had reached an agreement with the Writers Guild of America and was working towards negotiations with the Screen Actors Guild-American Federation of Television and Radio Artists.