Netflix subscriber numbers soar as password sharing crackdown pays off

Netflix’s password-sharing crackdown has continued to pay dividends, with the streaming market leader reporting 8.8 million new subsribers in the third quarter, well ahead of market expectations of six million additions. By comparison, in the same period last year Netflix signed up only 2.4 million new subs.

Netflix also announced an anticipated increase in prices, with a subscription to the premium version of the service in the US jumptng from US$19.99 to US$22.99, while the price of a basic ad-free plan will increase from US$9.99 to US$11.99. Prices will also rise in the UK and France.

The price of Netflix’s ad-supported tier will not change. Netflix is banking on building scale in its ad-supported tier in order to capture a larger share of overall advertising spend. The company said that it is still at an early stage, with ad revenues not expected to have a material impact this year.

The streamer turned in revenues of US$8.5 billion, up 7.8% and an operating margin of 22.4%. operating income was US$1.9 billion, up 25%.

Regarding paid sharing, Netflix said that the cancel rate continues to be low, exceeding expectations, and sharing households converting into full paying memberships are demonstrating “healthy retention”.

Over 70% of the streamer’s customers are now outside the US. Netflix now has more subscribers across EMEA than in North America, and its combined Latin American and APAC base is greater than either.

Netflix said that its ad plan membership shot up by 70% quarter-over-quarter, with 30% of sign-ups on average choosing the with -ads plan.

On the programming front, Netflix said it was planning to license more third party content, citing the success on the platform of USA Networks’ Suits.

Netflix said it was also looking to expand its retail and experience physical outlets, Netflix House.