Netflix added 5.9 million new subscribers in the second quarter, its biggest surge in paying users, a clear indication that its crackdown on password sharing is paying off.
The streaming giant revealed this in an earnings release on Wednesday noting that it had also ended the quarter with 238 subscribers.
Netflix started the crackdown on password sharing in February. The restrictions were first effected last year in Chile, Costa Rica, Peru, Argentina, the Dominican Republic, El Salvador, Guatemala, and Honduras. It was then Canada, New Zealand, Portugal and Spain and the company now plans to roll out the policy to other users across the world.
‘’’Tackling account sharing between households has been the company’s focus as it undermines the ability to invest to improve Netflix for the paying members and grow the business.’’ the company said
This plan seems to be paying off based on these numbers.
Other than the subscriber gains, Netflix also recorded $8.18bn in revenues and operating profit of $1.8B which it says were generally in line with its forecast.
‘’We expect revenue growth to accelerate in the second half of ‘23 as we start to see the full benefits of paid sharing plus continued steady growth in our ad-supported plan. ‘’ The company says.
The ad-based subscription plan, known as Basic with Ads was launched in October last year and priced at $6.99, lower than the other offers. It has 15-30-second ads playing before and during shows and films.
Netflix says it’s targeting a full-year 2023 operating margin of 18% to 20%.