Netflix’s subscriber growth rises after password sharing crackdown

SAN FRANCISCO: Netflix saw its highest springtime subscriber increase since the pandemic three years ago, proving that a crackdown on password sharing and a cheaper subscription option are working.

According to Wednesday’s quarterly financial statistics, the video streaming service added 5.9 million subscribers in April-June.

The results exceeded FactSet Research’s estimate of 2.2 million new members.

Netflix had 238.4 million customers in June.

Investors seemed unsatisfied, perhaps rattled by management commentary in a shareholder letter warning that “quite a competitive battle” continues to unfold against the backdrop of US writers and actors union strikes that threaten to clog entertainment pipelines to streaming services.

Wednesday’s extended trading saw Netflix’s stock drop 8%.

The dip may also represent investors locking in profits from the shares’ more than 50% rise this year.

After losing 1.2 million customers in the first half of 2018, money manager Louis Navellier said Netflix is “locked and loaded” again.

Netflix rebounded this year, but Investing.com analyst Jesse Cohen expects another slowdown.

Cohen said Netflix will struggle to maintain current subscriber increase.

Netflix expected July-September subscriber growth to match April-June statistics.

Netflix’s second-quarter result was its best since collecting 10 million customers in 2020 despite quite different market conditions.
Netflix introduced a low-cost version with advertisements last year and blocked password sharing, which has allowed an estimated 100 million individuals to view its TV shows and films for free.

Freeloading viewers must register their own accounts unless a subscriber with a regular or premium plan pays a USD 8 monthly extra to allow other homes to watch.