Netflix announced on Wednesday October 19 its quarterly results, better than expected, and a jump in its subscribers, despite the raging competition in streaming. According to a press release, from one quarter to the next the international company gained 8.76 million subscribers, reaching 247.1 million at the end of September, while over one year its portfolio increased by 10, 8%.
The platform explains the sharp increase in subscribers by its content and the rise of streaming on a global scale, but also by the success of its new pricing for accounts shared between several users. This was implemented at the end of May in around a hundred countries, it involves charging for sharing identifiers with people who are not members of the household.
According to Netflix estimates, before this development, more than 100 million households let other people use their account. The group also underlined, in a press release, that the rate of cancellation of subscriptions linked to this billing “remains low, below what we anticipated”. Furthermore, the proportion of people switching from using identifiers from another household to a paid subscription is “consequent”.
Seventeen billion invested in content
In addition to growth, the platform is showing notable profitability, at a time when its major competitors, Disney in the first place, are seeking to evolve their economic model to make it profitable. Netflix has thus raised its operating margin forecast for its entire 2023 financial year, to 20% now, i.e. the top of the initially targeted range, between 18% and 20%. The online video service plans a significant improvement for 2024, between 22% and 23%.
The platform also took advantage of the publication of its results to announce an increase in some of its prices in the United States, the United Kingdom and France, which should further improve its profitability. In detail, the price of the basic offer (basic or essential) is increased, as is that of the Premium plan, while the versions with advertising and standard remain unchanged. Netflix thus deliberately keeps the price of the offer with advertising low, which constitutes a flagship product for people who are not yet subscribed to the platform.
Over the three months from July to September, net profit was up 20%, to $1.6 billion. Turnover increased by nearly 8%, to $8.54 billion. Favorably positioned, Netflix intends to accelerate further. If expenses linked to content production should be lower than expected in 2023, around $13 billion, due to the screenwriters’ and actors’ strike, the group plans to put around $17 billion on the table. next year.