While Netflix’s password-sharing crackdown may not be popular with consumers, it’s seemingly having the intended effect for the company’s bottom line.
Netflix revealed its third-quarter earnings today, announcing that it added 8.8 million new subscribers last quarter, marking its best quarterly subscriber growth in more than three years. For comparison, it added 2.4 million subscribers during the same period last year.
The company also announced plans to increase the prices of basic and premium tiers in the U.S., U.K., and France, which will be effective immediately.
In the U.S., the price of the basic plan – the lowest-cost tier without ads, which is no longer available to new subscribers – will jump from $9.99 to $11.99. The premium plan, which allows users to watch in Ultra HD across four supported devices at a time, will go from $19.99 to $22.99.
In the U.K., the basic plan will jump up from £6.99 to £7.99, while the premium plan will go from £15.99 to £17.99. In France, the price will increase to 10.99€ for the basic plan and 19.99€ for the premium plan.
The ad-supported and standard plans remain unchanged for those regions. In announcing the move to shareholders today, Netflix said that while it paused price hikes during the password-sharing crackdown, "our overall approach remains the same — a range of prices and plans to meet a wide range of needs, and as we deliver more value to our members, we occasionally ask them to pay a bit more."
It came out earlier this month that Netflix is reportedly planning on increasing prices once the SAG-AFTRA strike is resolved. It's part of an ongoing trend that sees streaming platforms at large becoming more and more expensive, with Disney's Hulu and Disney+, as well as Discovery+, all increasing in price this month.
The Password Crackdown Continues to Play Out
Netflix officially started cracking down on shared accounts in May, offering subscribers the option to add another subscriber outside of their household to their plan - but for $7.99 a pop. While the move angered subscribers, it quickly started to show payoff for Netflix as it added 5.9 million subscribers last quarter (the first quarter with the crackdown in effect).
In touting its big subscriber growth this quarter, Netflix said the "cancel reaction [to the password-sharing crackdown] continues to be low, exceeding our expectations, and borrower households converting into full paying memberships are demonstrating healthy retention."
"Going forward, we’ll continue to refine and optimize our approach to convert additional borrower households into either full paying members or extra members over the next several quarters," the company said.
It's seemingly inspired other streaming services to start taking similar approaches, with Disney CEO Bob Iger announcing in August that Disney+ will start taking aim at password-sharing in 2024.
Outside of bringing the hammer down on shared accounts, however, Netflix also pointed to popular original series for its subscriber growth, including the live-action adaptation of One Piece (which was swiftly renewed after its August premiere), The Witcher Season 3, and Sex Education Season 4, as well as licensed hits like Suits, which has broken streaming viewership records over the past few months.
Netflix also acknowledged that it's been a "challenging" six months amid the SAG-AFTRA strike and the recently ended writers' strike, which saw the Writers Guild of America score several key measures in areas like artificial intelligence and the size of writers' rooms in their negotiations with Hollywood studios like Netflix.
"While we have reached an agreement with the WGA, negotiations with SAG-AFTRA are ongoing," Netflix said today. "We’re committed to resolving the remaining issues as quickly as possible so everyone can return to work making movies and TV shows that audiences will love."
Netflix will hold a call to discuss these earnings later today.
Alex Stedman is a Senior News Editor with IGN, overseeing entertainment reporting. When she's not writing or editing, you can find her reading fantasy novels or playing Dungeons & Dragons.
