Netflix password-sharing: Following a strict crackdown on password-sharing, Netflix hopes to raise prices for its ad-free tier, despite competitors like Disney increasing prices this year.
After Netflix’s strict stance on password-sharing, it’s expected that in the third quarter, there could be an increase of nearly 6 million customers, and it’s anticipated that the streaming leader will prepare the ground for price hikes when reporting earnings on Wednesday.
As the sole beneficiary among major streamers, Netflix has resisted joining competitors like Disney in raising prices for ad-free plans this year. Instead, it has cracked down on password-sharing outside households, penalizing those who use its service without a subscription.
Analysts have said, “Netflix now seems to be a utility in many markets.” “The challenge of being labelled as a utility is how a mature company continues to grow.”
Five months after the strike that threw Hollywood into chaos, the Writers Guild of America (WGA) approved a new agreement with major studios last week.
However, Netflix has weathered this strike well, thanks to its significant international presence and a strong content slate.
After a slow start to last year’s ad plan, analysts expect Netflix to increase the prices of its ad-free options in the coming months to bring in more customers at a higher level, where ads generate more revenue per user.
So far, most Netflix subscribers have opted for ad-free plans after the password crackdown. The cost of its standard plan with ads is $6.99 per month, while ad-free plans start at $15.49.
According to Visible Alpha estimates, with 2.8 million customers expected to join in the third quarter, ad-level revenue is projected to reach nearly $188.1 million in September.
Overall, Wall Street expects the streamer to post its strongest third-quarter customer growth this year.
Revenue in the third quarter likely increased by 7.7% to $8.54 billion, the fastest growth in five quarters, credited to strong programming, including the latest seasons of “Sex Education” and “Virgin River.”