Netflix reports strong growth in subscribers after the ban on shared passwords
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Increasing subscribers. A bit all over the world. Netflix’s crackdown on password sharing has taken its toll. The quarterly data of the streaming TV giant photograph it. The company had 5.9 million more subscribers in the past three months than the previous quarter, as a result of the ban on shared passwords.
According to company data, around 100 million people around the world used Netflix by taking advantage of shared passwords: from friends, relatives, acquaintances. And some of these would have convinced themselves to sign up for a subscription, at least in the countries where the squeeze was decided, above all America and the Old Continent, for a total of 100 countries.
Hollywood strikes. Brake on the production of series and films
Cash flow increased from $3 billion to $5 billion in the recent quarter, reflecting a decline in Netflix’s investment in new products and new series. Not a deliberate choice, the company specified. But a consequence of the Hollywood strikes that led the company to invest less this year. “It’s not what we wanted,” said co-CEO Ted Sarandos. The company has not yet reached an agreement with the unions. And the American film industry is still in turmoil, also due to fears on the part of screenwriters, actors and related industries that they may be the first to suffer, and heavily, the impact of artificial intelligence.
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Returning to the company’s accounts, revenues were lower than forecasts, an element that caused the stock to collapse in the pre-market on Wall Street where it lost 6.7%. The stock has so far gained 60% in 2023. “Although we have made steady progress this year, we still have a lot of work to do to accelerate our growth again,” the company wrote in a letter to shareholders.
The new password rules work. But doubts remain
Offering a variety of high-quality shows and movies is key to retaining members, Netflix said. It highlighted its most popular content during the quarter, including action films ‘Extraction 2’ and ‘The Mother’, sci-fi show ‘Black Mirror’ and ‘Queen Charlotte: A Bridgerton Story’.
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Netflix’s new rules limit the number of people who can share a subscription outside the primary account holder’s home and require the account owner to pay more to do so. Restrictions on password sharing represent an important source of new revenue for the company, although doubts remain whether in the long run this strategy could be counterproductive, annoying old subscribers who could opt for other solutions. At a lower cost.
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