Spain’s Netflix raises prices by 27%. However, its subscribers keep rising.
Netflix released its second quarter 2024 results and has been growing for months. The most bizarre thing is that it continues to take unpopular measures (its latest price increase affects Spain and Italy today), but its meteoric rise has not stopped.
Five million plus. Netflix announced 5.1 million new paying subscribers, bringing its total to 282.72 million. This represents 14% annual growth. This beat analysts‘ predictions. At $9.825 billion, profits are up 15% from last year.
But there are rises. Netflix is increasing rates in Spain and Italy, following similar increases in Europe, the Middle East, Africa, and Japan. In the US, the increase is delayed until a better time. The three Spanish rates, which have not increased since October 2021, are:
Increases of 1.1% for the Premium plan, 7.6% for the Standard plan, and 27.3% for the Standard plan with ads, which is most affected. Netflix keeps eliminating the basic rate. After Spain in 2023, Brazil is next.
Promoting ads. These price hikes are driving people to Netflix’s ad-supported plan, which is half the price. Netflix says “Our ad-supported plan allows us to offer a lower price to consumers, which is proving very popular: in the third quarter, it accounted for more than 50% of subscriptions in our ad-supported countries and the number of members grew by 35% quarter-over-quarter (…)
Our ad-supported plan has similar viewing hours per membership to our standard plan in 12 countries, which we are pleased with.”
This seems counterintuitive. It’s not. Even though Netflix’s networks have been threatened with abandonment since 2023, the backlash to the price hike and the ban on shared accounts, one of its least popular measures, has not hurt its finances. But Netflix’s path was set since 2022, when it announced a real subscriber drain in spring. In response, the company began “the Great Correction “, which led it to win the streaming wars.
More ads, higher prices. Netflix implemented a series of cheaper subscriptions with advertising and ended account sharing, which had become a key marketing strategy for the company. Since account sharing stopped in May 2023, the platform has added 45 million subscribers and its share price has increased by over 300%. This occurred after Reed Hasting left as CEO and Greg Peters and Ted Sarandos, who share the chair, took over.
What remains. Netflix’s 2025 revenue forecast is juicy: 43–44 billion dollars. Of course, they will stop announcing subscribers except annually in case the figures stagnate, which they predict. Netflix will grow 11-13% next year if these predictions are accurate.
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