In its earnings report released on Wednesday, Netflix announced that it has gained 8.76 million new subscribers over the last few months, bringing its global user base to 247.15 million.
The company also reported a significant increase in its ad-supported plan, which saw a 70% growth in membership this quarter. The most affordable subscription tier now accounts for 30% of all new sign-ups across 12 countries.
Price Adjustments and Plan Changes
In response to shifting dynamics, Netflix is making price adjustments. The $9.99 Basic plan will now cost $11.99, and the $19.99 Premium plan will increase to $22.99. The ad-supported and Standard plans remain unchanged.
Price adjustments also apply in the UK and France, with the Basic and Premium plans rising in cost. In the UK, Basic and Premium plans will be priced at £7.99 and £17.99, respectively, while in France, the Basic plan will cost 10.99€, and the Premium plan will be 19.99€.
Revenue Expectations and Subscriber Growth
Netflix anticipates an 11% revenue increase in the fourth quarter, reaching $8.69 billion. Subscriber additions are expected to remain similar to the third quarter, although the strong U.S. dollar may impact revenue negatively by approximately $200 million.
Netflix is aiming for a 20% operating margin for full-year 2023, which is at the high end of the previously forecasted range of 18% to 20%. For full-year 2024, it expects operating margins between 22% and 23%. The company also plans “substantial changes” to its executive compensation model in 2024, while still emphasizing performance-based rewards.
Upcoming Content Highlights
Netflix has an exciting lineup of content for the coming months, including its first live sporting event, The Netflix Cup, Squid Game reality show, and Scott Pilgrim anime. Additionally, it has secured a multi-year agreement with Skydance Animation for animated movies.
Notable titles include “Leo,” starring Adam Sandler, and “Chicken Run: Dawn of the Nugget,” the sequel to the highest-grossing stop-motion animated film, Chicken Run.
The upcoming months promise an exciting schedule, with the final season of The Crown, Berlin in the Money Heist franchise, reality competition show Squid Game: The Challenge, and numerous films featuring top talent.
It will release movies with renowned actors such as Julia Roberts, Chris Evans, Natalie Portman, and many more, along with critically acclaimed films from top directors.
On the announcement, Netflix shared in its report that:
In the past six months, our industry faced challenges due to strikes by writers and actors in the US. We’ve reached an agreement with the WGA, but negotiations with SAG-AFTRA are ongoing. We’re committed to resolving these issues swiftly, so everyone can get back to creating beloved movies and TV shows.
Regarding ads, it’s been under a year since our launch. Building a new business from scratch takes time, and we’ve noted that ad revenue won’t significantly impact us in 2023. We’re very optimistic about the long-term potential in this $180 billion market, especially as more viewers shift from linear to streaming.
Our ad tier has strong member engagement, and while there’s work ahead, we’re making solid progress, laying the foundation for a multi-billion dollar revenue stream over time. Our immediate focus is growing our ad membership, making Netflix an essential choice for advertisers, a critical step for ads to become a significant part of our business.