Netflix Adds Nearly 6 Million Paid Subscribers Amid Password Sharing Crackdown
Netflix’s efforts to crack down on password sharing seem to be paying off, as the streaming giant reported a significant increase in paid subscribers during the second quarter. The company added nearly six million paid subscribers between April and June, bringing its total global subscribers to over 238 million.
Netflix has now launched paid sharing in more than 100 countries, encouraging users to stop sharing accounts with others for free. The move appears to be working, with revenue in these regions surpassing pre-rollout levels, and sign-ups outpacing cancellations. Netflix’s chief financial officer, Spencer Neumann, hailed the launch of paid sharing as the “primary revenue accelerator” for the year during the company’s earnings call.
However, the results come at a critical moment for Netflix as it faces challenges from the Hollywood actors and writers’ unions’ strikes, which could impact its future original content. Co-CEO Ted Sarandos addressed the strikes during the call, expressing a desire for a conclusion to move forward.
While Netflix’s clampdown on password sharing boosted revenue for the quarter, it fell just short of Wall Street’s expectations. The company posted nearly $8.19 billion in revenue, slightly below the projected $8.3 billion. Nonetheless, Netflix’s net income increased by 3% from the same period last year, reaching $1.49 billion.
Despite the progress made, Netflix acknowledged the need for further growth acceleration. Subscriptions to the lower-priced, ad-supported plan have doubled since the first quarter, but ad revenue remains insignificant for the company.
After the earnings report, Netflix’s shares fell more than 4% in after-hours trading. For the current quarter, Netflix expects revenue of $8.5 billion, a 7% year-over-year increase, but lower than analysts’ expectations of nearly $8.7 billion. The company also anticipates similar paid net additions in the September quarter as in the June quarter.
