Its sales and profits are growing, but Netflix is ​​raising prices worldwide – News

On Thursday, Netflix announced that it received a net profit of $2.36 billion (CZK 54.9 billion) in the third quarter, which was 41 percent higher year on year. Sales also grew, by 15 percent to 9.82 billion dollars (228.4 billion CZK).

The numbers beat analysts’ estimates. The good news was also reflected in the share price, which strengthened more than six percent in the pre-trade level on Friday. Nevertheless, the company needs to assure its investors of a bright economic future.

It told them on Thursday that it was “working to improve our monetization by updating our plans and prices” and that it had already raised prices in Japan and parts of Europe, the Middle East and Africa over the last month, wrote the British site. BBC.

After all, the price of membership did not escape even in the Czech Republic, where prices rose by an average of a fifth in August. This was the first ever price increase for Netflix in the eight years it has been available in the Czech Republic. Starting this week, higher prices than before also apply to consumers in Italy and Spain.

Netflix decided to change the price list, among other things, because the number of subscribers is driven by the crack on password sharing, which the company decided to do two years ago, which ‘ begin to weaken. In the third quarter, the service added 5.1 million new subscribers, the smallest increase in more than a year.

The company is under pressure from investors who wonder how it will grow in the coming years, as growth through new subscribers is already more difficult to achieve given the size of the t -service. Currently, Netflix has more than 282 million subscribers worldwide.

According to analysts, the solution for further growth is to include advertisements, which could be a big business for Netflix in the end. In some markets, Netflix already offers an ad-free subscription option, and this option should be available in more countries next year.

Matt Britzman, chief equity analyst at Hargreaves Lansdown, said the strong financial position puts Netflix in a position to continue spending on new hits, which is key to justifying price increases to consumers. .

“It’s really a market where consumers are happy to switch streaming services if they don’t feel they’re getting their money’s worth,” he told the BBC.