Netflix Inc. is increasing prices for some customers in the US, UK, and France after posting its best quarter for subscriber gain in years, an indication of management’s confidence in the future even as rival streaming services lose money.
The world’s top paid-streaming service said on Wednesday that it added 8.76 million customers in the third quarter, far exceeding analysts’ forecasts and strengthening its overall subscriber base to 247.2 million.
The firm credited a strong programming slate and its crackdown on password sharing.
Investors are concerned that Netflix might lose customers if it pushed people who were sharing accounts to purchase their subscriptions. However, the crackdown has led to a surge in new customers without a major growth in cancellations. Netflix is now on track to add more than 20 million customers this year, a significant jump from fewer than 9 million in 2022.
Shares of Netflix increased as much as 13 percent to $392 in extended trading after the outcomes were announced. They were up more than 17 percent this year through the close of regular trading Wednesday, exceeding the 12 percent growth for the S&P 500 Index.
The successful rollout of paid sharing, which allows customers to buy additional access for friends or family, has emboldened Netflix to increase prices in some of its largest markets.
Beginning Wednesday, the company is raising the price of its most expensive plan in the US by $3 to $23 and its basic plan by $2 to $12, while keeping two other plans the same. It’s taking similar steps in the UK and France, two other large markets.
Europe, the Middle East, and Africa accounted for the largest share of Netflix’s growth in the third quarter. The company added almost 4 million customers in that region. The average amount Netflix makes per customer hasn’t changed much in the past year.
This quarter, Netflix predicts revenue of $8.69 billion and earnings of $2.15 a share, both narrowly below Wall Street projections. The firm said subscriber additions would be similar to the just-ended quarter, plus or minus a few million.
The advantages of the password crackdown will continue over the following several quarters because Netflix has been implementing the plan in stages.
“We’re incredibly pleased with how it’s been going,” co-Chief Executive Officer Greg Peters said in a videotaped interview released after results came out.
Cracking down on password sharing is one of a duo of major initiatives at Netflix, which is attempting to revive development after a sluggish year or two. The company also rolled out an advertising-supported version of its streaming services in 12 markets. Nearly 30 percent of new customers in those markets opted for ads the previous quarter, the company said.
