Netflix’s bold move to crackdown on password sharing seems to be paying off as the streaming giant gains nearly 6 million new subscribers.
In the second quarter of 2023, Netflix experienced its biggest surge in paying viewers since the early days of the pandemic, adding a substantial 5.9 million subscribers.
The company now boasts over 238 million paying patrons, according to its latest earnings release.
The streaming platform has been actively working to tackle password sharing among viewers since May, aiming to bolster its profitability. Before the crackdown, more than 100 million households were found to be sharing Netflix accounts.
Commenting on the positive results, Louis Navellier, chief investment officer at Navellier and Associates, said, “Let’s face it, the crackdown on passwords is working. I was ecstatic with the results; I think they hit the ball out of the park with subscriber growth.”
The initiative was initially tested in select countries like the US and Germany, but Netflix plans to expand this strategy to other markets worldwide.
Netflix’s revenue had faced some challenges due to a slowdown in earnings growth, following the surge in viewership during the work-from-home trend since 2020.
To counter this, the company introduced a low-price option that included commercials and implemented measures to block shared passwords. This compelled customers to officially join the platform. Additionally, account holders were offered the option of paying an extra $8 (€7.14) in the US, allowing families in different households to share accounts.
Despite initial skepticism from the market, more Netflix users have now opted to pay for the service rather than cancel their subscriptions. The company’s revenue rose by 2.7% year-on-year in the second quarter, although it fell slightly short of market expectations.
