Netflix Sees Record Subscriber Surge After Block On Password Sharing

Netflix has gained significant growth in subscribers after the company cracked down on password sharing and introduced more affordable subscription options. 

The video streaming giant added a staggering 5.9 million subscribers from the April to June period, exceeding the previous 2.2 million anticipated by FactSet Research.

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Netflix’s total subscriber count reached a milestone of 238.4 million worldwide by the end of June. 

The crackdown on password sharing, which has been a concern for the company for some time, has evidently paid off in bolstering its subscriber base.

Despite the impressive numbers, investors appeared unsatisfied due to concerns raised in a shareholder letter.

Netflix management warned of an ongoing “quite competitive battle” as labour strikes in the US entertainment industry threaten to disrupt content pipelines for streaming services.

The warning sent ripples through the stock market, leading to an 8 per cent decline in Netflix’s stock price during extended Wednesday trading in the US. 

Money manager Louis Navellier expressed confidence towards Netflix. 

He told ABC that the company now appeared “locked and loaded” after navigating a turbulent period last year.

Last year, the company introduced a low-priced option that included commercials and then began to ban sharing passwords, which had enabled an estimated 100 million people worldwide to use its service for free.

Non-playing viewers are now required to open their own accounts unless a subscriber with a standard or premium plan agrees to pay an $8 monthly surcharge to let another person living in a different household to watch.

In its shareholder letter, management said the crackdown on password sharing is resulting in a “healthy conversion of borrower households into full-paying Netflix memberships.”

On Wednesday, Netflix also announced another cheap ad-free plan, allowing existing subscribers already paying for the $11 basic plan to keep it.

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