After cracking down on families that were sharing their passwords, Netflix added 5.9 million new customers in the last three months, which is almost three times as many as analysts had predicted.
Anticipations coming true
The leading streaming service is the first of the major media and technology businesses to release its most recent quarterly earnings. The industry has recently been battered by strikes by the writers’ and actors’ unions, the first time either union has walked out since the 1960s. Ted Sarandos, the co-chief executive, said, “This strike is not the result that we wanted. He stated that the business aimed to come to a decision “as soon as possible.”
In announcing its most recent quarterly earnings, Netflix stated that it generated $1.8 billion in profits on $8.3 billion in sales during the quarter. As consumers who had previously shared the service for free decided to pay for their own memberships, analysts had anticipated Netflix to add about 2 million additional households during the past three months. There are currently 238 million Netflix subscribers worldwide.
The strike over pay and the use of artificial intelligence (AI) is anticipated to have a significant impact on the industry over the upcoming months, pausing new seasons of popular international series and films like Gladiator 2 and Mission: Impossible – Dead Reckoning Part Two as well as streaming series House of the Dragon and The Last of Us.
Netflix starts US crackdown on password sharing
Preparations for the Future
According to some analysts, Netflix is more prepared to withstand the strike than its traditional media competitors. For the first time in its existence, the company saw subscriber losses last year. Since then, it has started to gain subscribers once more, and at the beginning of the year, it declared a crackdown on password sharing. More than 100 million households, according to the business, have shared passwords.
This week, analysts at Deutsche Bank predicted that through 2023, an increase in “paid sharing” would increase Netflix’s revenues. They also predicted that the company would profit from its backlog of programming, its global audience, and its capacity to produce international hits like Squid Game and Money Heist. In a note to investors, Deutsche Bank stated that “virtually all of the headwinds plaguing the traditional TV focused media companies are tailwinds for Netflix.” After a year, Netflix introduced an ad-supported membership in an effort to diversify its revenue stream.
In an effort to increase sign-ups for its ad-supported alternative, the business said on Tuesday that it was discontinuing its cheapest commercial-free monthly plan in the US and the UK. The subscription-based option, which cost $9.99 in the US and £6.99 in the UK, only allowed users to watch HD video to one device at a time. The current lowest-priced Netflix tier is its $6.99 (£4.99) per month ad-supported tier.
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