The turn of the screw on password sharing has paid off: Netflix now has more than 238 million subscribers, including 5.89 million added in the second quarter, an unexpected jump for the streaming platform.
The Californian group, which is currently undergoing, like its competitors, a major strike by actors and screenwriters in the United States, made $ 1.5 billion in net profit from April to June, according to its results press release published on Wednesday. .
“More subscriptions than cancellations”
Netflix has since May forced users in more than 100 countries to pay to add profiles to their account, instead of sharing their credentials for free, as many did before. “Revenue in each region is now higher than before the change, with already more subscriptions than cancellations,” the company said.
It will therefore immediately extend its policy of sharing paid user accounts to almost all countries where the service is present.
To raise the bar after a difficult 2022, Netflix wants to generate more revenue from each user. The cheapest subscription formula without advertising thus disappeared on Wednesday in the United States and the United Kingdom. “If you are currently subscribed to the ‘Basic’ offer, you can keep it until you change your plan or cancel your subscription”, specifies a message to users.
A formula with advertising and two subscriptions without ads
Viewers in these two countries, like those in Canada, now have the choice between a formula with advertising (at 7 dollars per month in the United States) and two more expensive subscriptions, without ads (15.5 and 20 dollars). . And they have to pay 8 dollars more per additional user every month.
“Netflix will increase pressure on password sharing and ad revenue growth,” commented Insider Intelligence’s Ross Benes. “This is no accident. As the service’s user base stagnates in an increasing number of countries, the group is looking to switch users
parasites to its formula with advertising”.
This research firm estimates that Netflix will generate $770 million in advertising revenue in the United States this year, and more than a billion in 2024.
The ad-supported subscription launched in November had nearly 5 million monthly active users worldwide as of mid-May, according to Netflix (a different number from subscriber counts). “Since the start of the year, our user base with ads has more than doubled,” co-CEO Greg Peters said at the time. “On average, more than a quarter of new subscribers choose this formula in the countries where it exists”.
“Building an advertising business from scratch is not easy and we still have a lot of work to do, but we believe that over time it will be worth billions of dollars,” the company said in the statement on Wednesday.
A strike of actors and screenwriters in Hollywood
Netflix posted $8.2 billion in revenue in the second quarter, slightly less than analysts expected. Its stock lost more than 8% in electronic trading after the close of the New York Stock Exchange.
Analysts “fear that the platform will find itself short of content because of the strike in Hollywood”, remarks Louis Navellier, director of investments of a consulting firm of the same name.
“But what matters at Netflix is user growth. And the password trick works. They’ve transformed the trial,” he told AFP.