LOS ANGELES : Netflix raised subscription prices for some of its streaming plans in the United States, Britain and France on Wednesday as it shattered new customer expectations, sending its shares soaring 10%.
The company picked up nearly 9 million new customers around the globe, surpassing the 6 million consensus forecast of Wall Street analysts surveyed by LSEG.
Netflix credited the gains to its crackdown on password-sharing and a steady flow of new programming such as global hit “One Piece.”
The company raised the U.S. price of the premium ad-free plan by $3 per month to $22.99. The one-stream basic plan rose by $2 per month.
Investors welcomed the news, sending Netflix shares climbing more than 10% in after-hours trading to $382.99
The streaming video pioneer has been searching for ways to increase revenue as it nears market saturation in the United States and faces competition from Walt Disney, Warner Bros Discovery and others.
PP Foresight analyst Paolo Pescatore said the company’s third-quarter growth was a testament to its password crackdown and the opportunities for future growth as it moves into advertising.
“It is firing on all cylinders, with recent efforts all heading in the right direction,” he said.
GLOBAL PRICE HIKES
In Britain, Netflix increased the basic plan price by 1 pound to 7.99 pounds. In France, basic rose by 2 Euros to 10.99 Euros.
The price hikes were announced in a third quarter earnings report that showed the company’s global subscriber base reached 247 million at the end of September.
The company posted revenue of $8.542 billion, in line with analyst forecasts. Earnings-per-share came in at $3.73, ahead of Wall Street’s expectation of $3.49.
Netflix projected fourth quarter revenue of $8.69 billion fell slightly below the $8.77 billion forecast of analysts polled by LSEG.
Media companies like Netflix have been grappling with labor tensions in Hollywood. While film and television actors have ratified a new contract, actors remain on strike.
The work stoppages shut down Netflix productions such as “Stranger Things.” The company argues, however, that it has navigated the strikes better than competitors because many of its productions take place outside the United States.
The strikes prompted Netflix to revise its projections on content spending. The company estimated it would invest around $13 billion on content in 2023, assuming the studios reach a settlement with striking actors “in the near future.”
That was down from the $17 billion it expected to spend.
Netflix said it continued to dominate viewership even with the strikes. Netflix programming accounted for 8% of television screen time, second only to YouTube, the company said, citing Nielsen data.