The combination of its two most recent strategies – limiting how many houses use the same user and the economic plan with ads – have given excellent results to the streaming giant
Netflix reported a growth of 5.9 million users around the world during the second quarter (Q2) of the year, which is considered an effect of decisions to limit the use of the same account in different homes (what is known as password sharing) and the offer of a cheaper plan, with notices.
The streaming giant has 238.3 million subscribers worldwide and its Q2 earnings per share of $3.29 far exceeded what Wall Street estimated ($2.86) and allowed revenue of $8.2 billion. Dollars.
Despite even higher total earnings expected, Netflix has managed to turn the tide after several quarters of losing subscribers.
“Now that we’ve launched paid sharing broadly, we have increased confidence in our financial outlook,” the company said in its quarterly letter to shareholders, reproduced by Deadline. “We expect revenue growth will accelerate in the second half of 2023 as monetization grows.”
Netflix announced that it expects to repeat the growth in this third quarter.
Regarding the criticized decision to limit the use of the accounts to a single household, putting an end to years of password sharing, the numbers reflect that it was the correct decision. Despite the complaints, there was no massive drop in subscribers: the vast majority continued as users, and several others joined after losing the ability to use a family member’s or friend’s account.
With Netflix extending the restriction to all the territories in which it operates, the results for this quarter are encouraging.
These new subscribers benefited from the plan with ads, a cheaper alternative that complemented the restriction of the other. In fact, Netflix recently removed one of its basic $10 deals, in the US and several other territories, to push even more people to the $7 plan, with ads. Having different plans, according to the needs and taste of the clients, is one of the greatest strengths of the platform.
