- Netflix gains subscribers with password-sharing crackdown
- Introduces low-cost plan with ads
- Predicts advertising revenue growth
By the end of the previous year, Netflix gained more subscribers by prohibiting account sharing and introducing affordable plans with advertisements.
A portion of the increase in Netflix subscribers at the end of the previous year can be attributed to the streaming giant’s implementation of a password-sharing prohibition.
The crackdown on password sharing, which began in several countries last May, prevented members of different households from accessing the same account.
It is producing the intended outcome of encouraging individuals to create their accounts, as the organization gained 13.1 million international subscribers during the final quarter of 2023.
Netflix experienced its third consecutive quarter of subscriber growth, surpassing the 8.8 million subscribers acquired during the July-September period.
By the conclusion of 2023, Netflix had amassed over 260 million worldwide subscribers, representing an annual growth rate of approximately 30 million subscribers.
In stark contrast to the 8.9 million subscribers it gained in 2022, this performance could have been better and prompted inquiries into the organization’s ability to contend with intensifying competition for viewers.
Netflix’s Shift: Prohibiting Sharing, Ads
However, Netflix reversed the trend by prohibiting password sharing and introducing a new low-cost streaming plan that included advertisements.
According to Netflix, the most affordable plan is now procuring 40% of new subscribers in countries where it is accessible, such as the United States and the United Kingdom.
The standard plan in the United Kingdom costs £4.99 per month with advertisements and £10.99 per month without. The premium plan costs £17.99 monthly.
Greg Peters, co-CEO of Netflix, predicted in a call with analysts that it would be a number of years before advertising sales generate substantial revenue.
He, however, informed analysts Netflix maintains its conviction that it can persuade subscribers who continue to circumvent the password-sharing prohibition to subscribe to its plans.
He stated that this [crackdown] will enhance our growth for years to come.
Additionally, Netflix announced on Tuesday that it will add WWE’s Raw, a popular wrestling program, to its platform.
