Netflix eyes more ‘Suits’ deals as EMEA subs soar & spending drops $4bn amid strikes

Suits

Netflix will explore licensing more programming following the success of Suits and is raising prices, but spending on content in 2023 is likely to be down $4bn as a result of the US strikes.

The streamer, which revealed its Q3 results yesterday, added that it had experienced better-than-expected subscriber growth over the last three months, sending its share price soaring 12%.

Netflix gained 8.8 million new subscribers to take its total up to 247 million, a marked increase from the 2.4 million new users gained this time last year.

Four million subscribers came from Europe, the Middle East and Africa, meaning more than 70% of its customers now live outside of the US.

Stock soars & price rises

The news cheered investors, which had only expected six million new subs, while plans to raise prices also sent the share price rising in after-hour trading.

Ted Sarandos

Netflix said prices would rise in the US, the UK and France, with a Stateside premium plan upped from $19.99 to $22.99.

Existing subscribers to the legacy basic plan will see prices rise to $11.99 from $9.99, but the ad-supported plan ($6.99) and the standard plan ($15.49) will not change.

In the UK, the premium plan will rise by £2 ($2.42) to £17.99 and by €2 ($2) in France to €19.99.

The streamer, which has been cutting down on password sharing of late, added that 30% of new subscribers are signing up to the ad-supported plan, where it is available.

Well-performing shows including manga adaptation One Piece were highlighted by the streamer, which has also seen an unexpected uptick from the revival in popularity of NBCUniversal’s Suits.

The show was the most watched show across the US for 12 weeks and the streamer said in its letter to shareholders that “as the competitive environment evolves, we may have increased opportunities to license more hit titles,” Netflix said in its quarterly letter to shareholders.

Strike spending

Netflix co-CEO Ted Sarandos highlighted the range of programming on the streamer as a vital tool in its ability to grow following release of the results and added that he was “totally committed” to ending the ongoing SAG-AFTRA strike.

But the streamer also highlighted that the lack of commissioning through the writers strike and now the actors strike means content spending in 2023 is expected to be only $13bn, with the assumption that a deal with SAG-AFTRA will be found in “the near future”.

Netflix had expected to spend $17bn on programming across 2023.

“These are the times I’m glad we have such a rich and deep and broad programming selection,” Sarandos said.

“The same was true during Covid, when we were able to manage the slate through a prolonged and pretty unpredictable production interruption.”

Netflix revenue stood at $8.54bn for Q3 as per expectations, with profits at $3.73 per share.