Netflix on Wednesday disclosed summertime subscriber gains that surpassed industry analysts’ projections, signaling the video streaming service’s crackdown on password sharing is converting former freeloaders into paying customers.
The streaming giant hiked the monthly price of its basic plan to $12 from $10 and its premium plan to $23 from $20.
Netflix’s $7 ad-supported plan will still cost $7 a month.
The price hikes take effect immediately..
The last time Netflix raised prices in the U.S. was in January 2022.
“As we deliver more value to our members, we occasionally ask them to pay a bit more,” Netflix said while announcing third-quarter earnings results. “Our starting price is extremely competitive with other streamers and at $6.99 per month in the US, for example, it’s much less than the average price of a single movie ticket.”
Growing economic pressures on the streaming industry has streaming providers raising prices and cracking down on password sharing. The trend is squeezing wallets and budgets.
Netflix, Disney+, Hulu and Peacock have announced price increases in recent months.
The current round of price increases signals once and for all that the era of cheap streaming has come to an end.
The Wall Street Journal estimated the average cost of watching a major ad-free streaming service will go up nearly 25% in about a year.
Netflix has launched other money-making efforts including cracking down on password sharing and an ad-supported tier of its streaming service.
Netflix reported third-quarter revenue of $8.54 billion, up from $7.9 billion in the year-ago quarter. Net profit rose 20% to $1.68 billion.
It added 8.8 million subscribers in the third quarter.