Netflix may raise prices after successful crackdown on password sharing
Written by Samrita A
(Reuters) – Netflix’s password-sharing crackdown is likely to boost its subscriber count by about 6 million in the third quarter, and the streaming pioneer said it was poised for price increases in its earnings report on Wednesday. It is expected.
Netflix, the only major streamer making a profit, has resisted rivals such as Walt Disney from raising ad-free prices this year, and has instead cut back on more than 100 million viewers who use the service without a contract. The sharing of passwords outside the home was restricted in order to allow people to use their personal information.
Bernstein analysts said that “Netflix is now very much like a public utility in many markets.” “The challenge with being called a utility is how can a mature company continue to grow?”
Media reported in early October that prices may increase after the Hollywood actors’ strike ends.
Five months after calling a strike that threw Hollywood into turmoil, the Writers Guild of America (WGA) approved new contracts with major studios last week.
However, Netflix has weathered the strike successfully thanks to its larger international presence and stronger content.
After a slow start to its ad plan launched last year, analysts believe Netflix will increase the price of its ad-free option in the coming months to drive more subscribers to other tiers and increase commercial is expected to contribute to increased revenue per user.
So far, most viewers who signed up for Netflix after the password crackdown have opted for ad-free plans, analysts said. The standard plan with ads costs $6.99 per month, while plans without ads start at $15.49.
“With these strategies, Netflix could double its ad-driven viewership next year,” said Ross Venez, an analyst at Insider Intelligence. He expects Netflix to show users more ads over time and catch up with rivals.
Visible Alpha estimates that ad inventory is expected to bring in about $188.1 million in revenue in the third quarter ending September, and add 2.8 million subscribers.
Overall, Wall Street expects the streamer to post its strongest quarterly subscriber growth this year, according to LSEG data.
Third-quarter revenue rose 7.7% to $8.54 billion, the highest increase in five quarters, thanks to strong programming, including the latest seasons of “Sex Education” and “Virgin River.” It is expected that
(Reporting by Samrita Arunasaram in Bengaluru; Writing by Aditya Soni; Editing by Sayantani Ghosh and Devika Shamnath)
