A lot more nine customers than hoped for
Netflix’s fight against password sharing is bearing fruit
October 19, 2023, 12:31 a.m
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For several months now, Netflix has been taking action against paying subscribers sharing their passwords. With success: the number of new subscribers increases higher than expected. In the future, however, some of them will have to dig deeper into their pockets
The fight against the unauthorized sharing of passwords is helping Netflix to achieve a significant increase in user numbers. At the same time, the streaming service announced price increases for some of its subscriptions. The share then rose by up to twelve percent in after-hours US trading. In their slipstream, titles from rivals such as Paramount and Walt Disney also rose.
In the USA, Great Britain and France, customers will have to dig deeper into their pockets to get the cheapest ad-free offer. In the USA, the premium subscription is also becoming more expensive. According to experts, Netflix wants to lure customers into advertising-financed offers. Because the advertising revenue per customer is higher than the monthly fees. Managers of the streaming service emphasized that this business area is still in its early stages.
Unexpected growth spurt
Similar to its competitors, Netflix is also suffering from weakening consumer sentiment worldwide. In addition, the streaming service is already widespread, especially in industrialized nations. “Netflix now resembles a utility in many markets,” wrote the analysts at asset manager Bernstein. “The challenge for a utility is to generate further growth.” For this reason, the company launched a campaign some time ago to encourage fellow password users to take out their own subscription. Thanks to these efforts, the number of new customers almost quadrupled to nine million in the past quarter. Analysts had only expected an increase of six million users.
Earnings also surprised positively at $3.73 per share. Sales, however, remained in line with expectations at $8.542 billion. For the current quarter, Netflix announced revenues of $8.69 billion, slightly less than hoped.