Netflix announced its global crackdown on password sharing was working and unveiled plans to increase prices as it announced its latest quarterly results on Wednesday.
The streaming media company added 8.8 million new subscribers over the last three months, far better than expected and up from 2.4 million in the same quarter last year. The increase came even as a strike by Hollywood actors and writers threatened to affect the rollout of new shows.
The price of a basic Netflix subscription in the US will rise by $2 to $11.99, while premium subscriptions will rise by $3 to $22.99. In the UK, a basic subscription will rise by £1 to £7.99, with premium memberships increasing by £2 to £17.99.
In Australia, prices will remain the same but the basic tier, currently priced at $10.99, will no longer be offered to new and rejoining subscribers from next week, in an effort to push them towards the more expensive “standard” tier, or the cheaper, ad-supported tier.
The basic tier will also be phased out for new subscribers in Germany, Spain, Japan, Mexico and Brazil next week. It has already been phased out in the US, UK, Italy and Canada.
Netflix began cracking down on people using shared passwords to access its service this summer. The company said the “cancel reaction” has been lower than expected.
The company also launched the ad-supported tier a year ago, which they said now accounts for 30% of new subscribers but added that it would take time to build the service “from scratch”.
“We remain very optimistic about our long-run opportunity in this very big market,” the company said in a statement.
Hollywood writers agreed to end their strike after a five-month walk out triggered in large part by grievances over the lack of revenue sharing from Netflix and other streaming services. Hollywood’s actors are still negotiating and remain on strike.
The dispute led to delays and cancellations that have cut Netflix’s expenses for the year. The company expects to invest about $13bn in content this year, down from the $17bn it expected to spend earlier this year.
Netflix reported revenues of $8.54bn, in line with projections. Net profit rose 20% to $1.68bn in the third quarter, topping its forecast. Netflix’s share price rose over 11% in after-hours trading.
