Netflix has shared its Q3 2023 earnings and ambitions for the future, and the news is looking pretty great—for shareholders, anyway. In a letter addressed to investors today, Netflix explained that it will attempt to boost its monetization with another price hike, taking its Basic and Premium plans to $11.99 (from $9.99) and $22.99 (from $19.99), respectively, for those in the U.S. These prices are effective immediately, as indicated in Netflix’s updated Plans and Pricing page, which notes that Basic plans are no longer available for new or rejoining members. Netflix also mentioned that it gained 8.8 million subscribers in Q3 2023, a huge improvement over the 2.4 million that it saw during the same period a year earlier, thanks to new efforts at limiting password sharing, including paid-sharing plans.
Revenue in Q3’23 grew 8% year-over-year on a reported and a foreign exchange (F/X) neutral basis. This was slightly above our forecast due to higher-than-expected member growth. Revenue growth in Q3 reflected a 9% year-over-year increase in average paid memberships (8.8M paid net additions vs. 2.4M in Q3’22) due to the roll out of paid sharing, strong, steady programming and the ongoing expansion of streaming globally. ARM decreased 1% year-over-year both on a reported and F/X neutral basis, in-line with our expectations. This was due to a number of factors, including a higher percentage of membership growth from lower ARM countries, limited price increases over the past 18 months, and some shift in plan mix.
While we mostly paused price increases as we rolled out paid sharing, our overall approach remains the same — a range of prices and plans to meet a wide range of needs, and as we deliver more value to our members, we occasionally ask them to pay a bit more. Starting today, we’re adjusting prices in the US, UK and France. In the US, our ads ($6.99) and our Standard plans ($15.49) will stay the same, while Basic will now be $11.99 and Premium $22.99. For the UK and France, our pricing for Ads/Basic/Standard/Premium are UK £4.99/£7.99/£10.99/£17.99 and 5.99€/10.99€/ 13.49€/19.99€, respectively (like the US, our Ads and Standard plans in UK and France are unchanged). Our starting price is extremely competitive with other streamers and at $6.99 per month in the US, for example, it’s much less than the average price of a single movie ticket.