Netflix could raise subscription cost of its ad-free plans
Netflix's efforts to curb password-sharing have likely resulted in an estimated gain of six million subscribers during the third quarter. Now, the streaming giant is anticipated to announce potential price hikes for its ad-free options when it releases the earnings report later this week, according to Reuters. Unlike rivals such as Walt Disney, the streaming giant hasn't raised ad-free prices this year. Instead, it's been focusing on the over 100 million viewers who use its service without subscribing.
Users may shift to ad-supported viewership
Netflix's price increase for its ad-free options will nudge more subscribers toward the ad-supported tier, where commercials bring in extra revenue for the company. The standard plan with ads is priced at $6.99/month and ad-free plans start at $15.49. Most new subscribers after the password crackdown have chosen ad-free plans. Ross Benes, an analyst, expects Netflix to double its ad-supported viewership next year and gradually show more ads to users, catching up with competitors.
Possible price hikes following strike resolution
With the Hollywood writers' strike resolved earlier this month, Netflix might consider raising prices soon. The Writers Guild of America (WGA) has approved a new contract with major studios, ending the five-month strike that disrupted the industry. Despite the chaos, Netflix has kept its strong international presence and content lineup, which could pave the way for price revision in the near future.
Netflix's Q3 revenue growth and strong programming
Netflix's third-quarter revenue is estimated to have grown by 7.7% to $8.54 billion, marking the fastest growth in five quarters. The ad tier generated around $188.1 million in revenue for Q3, with subscriber additions of 2.8 million, as per Visible Alpha estimates. This increase is credited to strong programming, including new seasons of hit shows like Sex Education and Virgin River.
