Netflix Sees Surge in Sign-Ups Amid Password Crackdown
Netflix experienced a significant surge in new subscriptions at the end of last year, driven by the company’s efforts to crack down on password-sharing. The streaming giant added over 13.1 million subscriptions in the last quarter of 2023, marking the highest quarterly growth since 2020.
The increase in sign-ups follows Netflix’s decision to implement measures against password-sharing, encouraging individuals to create their own accounts rather than sharing login credentials. Despite concerns about potential resistance from users, the strategy resulted in a substantial boost in new memberships.
Netflix remains confident in its growth trajectory and announced plans to resume its standard approach to price increases. Co-chief executive Greg Peters stated during a call with analysts that the company had temporarily halted price hikes while implementing the password-sharing measures but is now ready to return to “business as usual.”
Interestingly, many of the new subscribers opted for Netflix’s cheapest plan, which includes advertisements. In the 12 countries where the ad-supported plan is available, it accounted for 40% of the new sign-ups. This shift is noteworthy as Netflix had long resisted incorporating ads, citing concerns about compromising the viewer experience and potential privacy risks.
The streaming giant’s move into advertising and the introduction of live events, such as the recent $5 billion deal to bring WWE Raw to the platform, underscore its efforts to explore new revenue streams and attract a broader audience.
While Netflix had faced challenges in the first half of 2022 with an unexpected decline in subscribers and a subsequent fall in profits, its recent quarterly results demonstrate a successful rebound. The company’s strategy, including the password crackdown and ventures into advertising and live events, has been validated by the latest surge in subscriptions.
Analysts view Netflix’s performance as a testament to its position as the leading streaming service, with its unique content offerings and innovative approaches. Despite concerns about the absence of a standout hit in the last quarter, Netflix cited strong programming, including popular series like the Beckham documentary and Adam Sandler’s “Leo.”
Shares of Netflix surged more than 6% in after-hours trade following the announcement of its robust quarterly results. The streaming giant reported over $33.7 billion in revenue for 2023, representing a 6% increase over the previous year, with profits reaching $5.4 billion compared to $4.49 billion in 2022.
