Amid Netflix Password Sharing Ban, Subscribers Grow by Over 5 Million
- U-Report
Jakarta – Netflix announced on Wednesday that amid the Netflix password sharing ban, its subscribers grow by 5,9 million globally with the United States and Canada making 1.17 million new members from April to June.
For now, Netflix will start to handle password sharing in all its remaining countries. The company's password-sharing policy only went into effect in the United States in late May after the streamer started alerting users of the extra $7.99 or IDR 120 thousand per month charge.
Data from the analytics company Antenna suggests that the company saw a dramatic spike in subscribers in the days following the crackdown. In addition to the United States, Netflix also rolled out paid sharing in Canada, New Zealand, Portugal, and Spain.
Netflix.
- Freepik/freepik
Netflix says revenue is now “higher” in each of its regions, adding that signups are already outnumbering cancellations. The release noted Netflix is “seeing the healthy conversion of borrower households into full paying Netflix memberships” as well as more users adding extra members to their accounts, as reported from The Verge site.
During an earnings call, Netflix chief financial officer Spencer Neumann said most of the company’s revenue growth this year is going to come from those new paid memberships, “largely driven” by the company’s password-sharing rollout.
That is a sign execs don’t expect to raise prices across the board again in 2023 or see a significant impact on the bottom line from other projects like advertising or gaming.
While Netflix raked in $8.2 billion in revenue during the quarter, it now expects to have at least $5 billion in free cash flow for 2023 instead of its previous estimate of $3.5 billion. The company says the extra $1.5 billion reflects “lower cash content spend in 2023 than we originally anticipated” due to the Hollywood writers and actors strike.
The strike will likely make it harder for Netflix to push out new content. Shows like Stranger Things, Big Mouth, Emily in Paris, The Sandman, and more have halted production amid the strike.
Netflix’s $6.99 or IDR 105 thousand per month ad-supported tier may have also contributed to the streamer’s 3 percent year-over-year increase in revenue.
While the tier had a bit of a slow start, it grew to 5 million users globally in May as Netflix added support for 1080p video and the ability to watch two streams at once.
As Netflix continues to double down on advertising, it pulled access to the cheapest ad-free plan in the United States, United Kingdom, and Canada, a move Netflix co-CEO Greg Peters said will “optimize” the service’s plan structure.
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