Netflix adds nearly 6 million paid subscribers amid password sharing crackdown
Netflix’s crackdown on password sharing appears to be paying off.
During the three months ending in June, the streaming giant added nearly six million paid subscribers, bringing its total to 238 million.
After launching paid sharing earlier this year, the company has now launched it in more than 100 countries, following its broad rollout earlier this year. According to Netflix, revenue in those regions is now higher than before the service launched, and “sign-ups are already exceeding cancellations.”
During the company’s second quarter earnings call, Netflix’s chief financial officer, Spencer Neumann, described paid sharing as the company’s “primary revenue accelerator.”
As a result of our paid sharing rollout, the majority of our revenue growth this year has come from new paid memberships.
The results come at a pivotal moment for Netflix as the streamer looks to boost revenue by limiting password sharing and introducing an ad-supported subscription option while facing a fresh challenge: Hollywood actors and writers union strikes that could impact its future slate of original shows and movies.
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On the call Wednesday, Netflix co-CEO Ted Sarandos expressed disappointment with the strikes.
Asked whether Netflix might run out of original content if the actors’ and writers’ strike continues, Sarandos pointed to Netflix’s investments in unscripted and international content, among others.
“What matters is getting the strike to a conclusion so that we can all move forward,” he said.
Despite Netflix’s password-sharing crackdown, revenue fell just short of what Wall Street analysts expected for the quarter. Compared to the $8.3 billion Wall Street expected, Netflix reported nearly $8.19 billion in revenue for the quarter. A net income of $1.49 billion was also posted, up 3% from last year’s same period.
Despite steady progress this year, the company said it needs to work harder to accelerate its growth. Despite the growth in subscriptions to Netflix’s lower priced, ad-supported plan, Netflix’s current ad revenue isn’t significant.
In after-hours trading Wednesday, Netflix shares fell more than 4%.
It expects to generate $8.5 billion in revenue in the current quarter, an increase of 7% year-over-year, but below the $8.7 billion analysts anticipated. According to the company, the September quarter will see similar paid net additions to the June quarter.