Netflix may hike prices after success of password-sharing crackdown

netflix-may-hike-prices-after-success-of-password-sharing-crackdown
Netflix may hike prices after success of password-sharing crackdown

Netflix’s crackdown on password-sharing likely resulted in a 6 million increase in subscribers during the third quarter. When the company reports its earnings on Wednesday, it is expected to lay the groundwork for price increases. Unlike its competitors, such as Walt Disney, Netflix has chosen not to raise ad-free prices this year. Instead, it has focused on limiting password-sharing outside of households to target the large number of viewers who use its service without subscribing.

According to analysts at Bernstein, Netflix now resembles a utility in many markets. However, the challenge for a maturing company labeled as a utility is finding continued growth. A media report in October suggested that Netflix could raise prices after the conclusion of the Hollywood actors strike.

The Writers Guild of America recently approved a new contract with major studios, bringing an end to the strike that caused turmoil in Hollywood. Despite the strike, Netflix has fared well due to its strong international presence and compelling content lineup.

Analysts predict that Netflix will raise prices for its ad-free options in the near future to encourage more subscribers to choose the tier with commercials, which generates higher revenue per user. Since the password crackdown, most new subscribers have opted for the ad-free plans. The standard plan with ads costs $6.99 per month, while the ad-free plans start at $15.49.

Insider Intelligence analyst Ross Benes believes that Netflix will likely double its ad-supported viewership next year by implementing these strategies. He expects the company to increase the number of ads shown to users over time, catching up with its competitors. Visible Alpha estimates that the ad tier will generate approximately $188.1 million in revenue and add 2.8 million subscribers in the third quarter.

Overall, Wall Street anticipates that Netflix will report its strongest quarterly subscriber additions this year. Revenue in the third quarter is expected to have grown by 7.7% to $8.54 billion, marking the fastest growth in five quarters. This growth can be attributed to the success of popular shows like “Sex Education” and “Virgin River.”

In conclusion, Netflix’s crackdown on password-sharing has led to a significant increase in subscribers. The company is likely to raise prices in the future and focus on its ad-supported options to drive revenue growth. Despite challenges such as the Hollywood actors strike, Netflix has managed to thrive due to its global presence and compelling content.

About News Team

Hi, I'm Alex Perez, an experienced writer with a focus on lifestyle and culture news. From food and fashion to travel and entertainment, I love exploring the latest trends and sharing my insights with readers. I also have a strong interest in world news and business, and enjoy covering breaking stories and events.

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