Netflix raises prices as password boost fades
Netflix
Baby Reindeer, created by and starring Richard Gadd, has been a big hit for Netflix
Netflix is starting to raise prices in some countries as growth spurred by its crackdown on password sharing starts to fade.
The film and TV streaming giant said it had already lifted subscription fees in Japan and parts of Europe as well as the Middle East and Africa over the last month.
Changes in Italy and Spain are now being rolled-out.
In its latest results, Netflix announced that it had added 5.1 million subscribers between July and September – ahead of forecasts but the smallest gain in more than a year.
The company is under pressure to show investors what will power growth in the years ahead, as its already massive reach makes finding new subscribers more difficult.
The last time Netflix saw signs of slowdown, in 2022, it launched measures to stop password sharing and said it would offer a new streaming option with advertisements.
The crackdown unleashed a new wave of growth.
The firm has added more than 45 million new members since last year and has 282 million subscribers globally.
Analysts also expect advertisements to eventually become big business for Netflix.
For now, however, Netflix has said it remains “early days” and warned it did not expect it to start driving growth until next year, despite many subscribers opting for the ad-supported plan.
The plan, which is the company’s least expensive option, accounted for 50% of new sign-ups in the places where it is offered in the most recent quarter, Netflix said.
Even without a boost from advertising, Netflix said revenue in the July-September period was up 15% compared with the same period last year, to more than $9.8bn (£7.5bn).
Profit also rose from $1.6bn in the same period last year to $2.3bn.
Netflix last raised prices in the UK and US in 2023 but that only affected certain plans. It has left the price of its popular “standard plan” without adverts untouched since 2022.
In the past, the company has sometimes experimented with pricing in smaller countries before making changes in major markets, such as the US and UK.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said Netflix’s strong financial position put the firm in a position to keep spending money to make new hits – the key if it hopes to raise prices without backlash.
“This is inherently a fickle market, with consumers happy to swap streamer if they don’t think they’re getting value,” he said.
“The addition of fresh content is key to that, especially in areas like sporting events, and could give Netflix the edge it needs to push prices higher and keep customers coming back for more.”
One of Netflix’s biggest successes has been Baby Reindeer, a drama created by and starring Scottish comedian Richard Gadd.
The controversial series won four Emmy Awards last month.
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