In the midst of an ongoing US entertainment industry strike, Netflix disclosed yesterday that its subscriber base surged by nearly six million, following the implementation of stricter measures against password sharing. A recent earnings release reveals the streaming titan ended the quarter with a total of 238 million subscribers, boasting a profit of US$1.5 billion.
Netflix’s pick-up in subscribers comes at a pivotal time when the entertainment industry is grappling with a potentially devastating actors and writers strike. Analysts, however, opine that Netflix is better equipped to navigate this turbulence than its competitors. Ted Sarandos, Netflix’s co-CEO, emphasized during an earnings presentation that “We are constantly at the table negotiating… we need to get to this strike to a conclusion so that we can all move forward.”
Despite an impressive growth in subscribers, Netflix’s Q2 earnings did fall short of revenue expectations. Posting US$8.2 billion in sales over the April to June period, company shares dipped more than 8% in after-hours Wall Street trading.
Earlier this year, Netflix launched an aggressive crackdown on users sharing passwords beyond their immediate family circles, in a bid to bolster revenue following a challenging phase last year. As per company reports, more than 100 million households were sharing accounts on the service. Louis Navellier, Chief Investment Officer of Navellier and Associates, commended Netflix’s effort, stating, “The crackdown on passwords is working… they hit the ball out of the park with subscriber growth.”
In its pursuit of converting non-paying users, Netflix introduced “borrower” or “shared” accounts that allow subscribers to add extra viewers for a higher price or transfer viewing profiles to new accounts. Furthermore, Netflix is increasingly focusing on advertising revenue and has also eliminated its lowest-priced ad-free plan that cost US$10 a month in the US.
Despite the successful growth in subscriptions, the ongoing actors and writers strike poses a significant challenge to Netflix and the broader film and television industry. The first industry-wide walkout in 63 years has effectively shut down Hollywood, creating a potential content shortage.
Regardless of these challenges, Netflix remains confident, citing a robust slate of releases and a large base of upcoming films and shows from across the globe. Netflix proudly shared a list of returning seasons, including The Crown and Virgin River, claiming to offer “more returning seasons than any other streamer” this year.
This news is based on an article from malaymail.com.
