Netflix subscription prices set to increase in these regions
The popular streaming giant announced an increase in subscription prices in the US, the UK, and France, distinguishing ad-free plans from its entry-level ad-supported plan.
This move comes after a robust Q3 earnings performance, which saw the company achieving a revenue of $8.5 billion, paid net adds of 9 million, and an operating margin of 22.4%.
The forecast for FY23 operating margin has been set at 20%, at the high end of the previously estimated range of 18% to 20%.
Netflix’s price increment strategy is devised to bring a clearer differentiation between its ad-free plans and the entry-level ad-supported plan.
The most expensive plan will now cost $22.99 per month for new subscribers. The price adjustment is seen as a move to capitalise on the company’s strong market position and solid Q3 financials.
Netflix subscription prices are expected to remain unchanged in South Africa for the rest of the year.
Q3 earnings shows Netflix has $6.5 billion in free cash flow
The Q3 earnings report also highlighted that Netflix expects the FY23 free cash flow to be around $6.5 billion, up from the earlier forecast of at least $5 billion.
Additionally, the company repurchased $2.5 billion of shares in Q3 and increased its buyback authorisation by $10 billion.
Netflix continues to ramp up its content offering with a mix of best-in-class originals and licensed titles from across the globe.
Hits like One Piece S1, The Witcher S3, and Sex Education S4 were among the titles that contributed to the firm’s success in Q3.
Furthermore, the adoption of its ad plan is on the rise, with almost a 70% quarter-over-quarter increase in ad plan membership, supporting the growth of its $6.99 per month ad plan in the US.
The company faced some industry challenges in the last six months due to combined writers and actors strikes in the US.