Netflix says its password-sharing crackdown is working. In its second quarter earnings report posted on Wednesday, the streamer says it saw the addition of 5.9 million subscribers globally, with the US and Canada making up 1.17 million new members from April to June.
Netflix says password-sharing crackdowns caused more signups than cancellations
Netflix says password-sharing crackdowns caused more signups than cancellations
Now, Netflix will start to address password sharing in all its remaining countries. The company’s password-sharing policy only went into effect in the US in late May after the streamer started alerting users of the extra $7.99 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 US, Netflix also rolled out paid sharing in Canada, New Zealand, Portugal, and Spain.
Netflix says revenue is now “higher in each region is now higher than pre-launch,” adding that signups are already outnumbering cancellations. Additionally, the streamer adds that it’s “seeing healthy conversion of borrower households into full paying Netflix memberships” as well as more users adding extra members to their accounts.
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 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 US, UK, and Canada.
We’ll update this article if we hear more during Netflix’s earnings call, which is set to go live at 6PM ET.
Disclosure: The Verge recently produced a series with Netflix.