The number of subscribers on Netflix jumped from 5.89 million in the second quarter, to more than 238 million in all, thanks in particular to its policy of restricting the sharing of passwords between users, the American company announced on Wednesday.
The streaming platform, which like its competitors is currently undergoing a major strike by actors and screenwriters in the United States, made 1.5 billion US dollars in net profit from April to June, a result that also exceeded market expectations.
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.
“Revenues in each region are now higher than before the change, with already more subscriptions than cancellations,” the group said in its quarterly results release.
The policy of paid sharing of user accounts will be immediately extended to almost all countries where the service is present.
To raise the bar after a difficult year 2022, Netflix seeks to extract more income from each user.
The cheapest ad-free subscription plan 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 formula or cancel your subscription”, specifies a message to users.
“Raise the pressure”
Viewers in these two countries, like those in Canada, now have the choice between the formula with ads (at 7 US dollars per month in the United States) and two more expensive subscriptions, without ads (15.50 and 20 dollars ).
They also have to pay an additional $8 per additional user every month.
“Netflix will increase the pressure on password sharing and ad revenue growth,” commented Ross Benes of Insider Intelligence.
” It is not a coincidence. As the service’s user base stagnates in a growing number of countries, the group is seeking to switch ‘parasitic’ users to its formula with ads”.
This research firm estimates that Netflix will generate $770 million in advertising revenue in the United States this year, and more than $1 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 beginning of the year, our user base with ads has more than doubled,” said co-CEO Greg Peters 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.
Strike
Netflix posted $8.2 billion in revenue in the second quarter, slightly less than analysts expected.
Its stock lost more than 5% in electronic trading after the closing of the New York Stock Exchange.
These financial results were published as actors and screenwriters went on massive strike in the United States, causing the worst paralysis of the sector for more than 60 years.
Friday, hundreds of them paraded in front of the Netflix building in Hollywood (Los Angeles), but also elsewhere and in front of other studios and streaming services like HBO, Amazon and Paramount.
The two trades are demanding an increase in their remuneration, at half mast in the era of streaming. They also want to obtain guarantees concerning the use of so-called generative artificial intelligence, to prohibit the latter from generating scripts or cloning their voices and images.
“We want to work very hard to find a fair and just solution to avoid the strike,” co-chief executive Ted Sarandos said in April.
“But if it takes place, we have a strong base of films and programs from around the world,” he added. “We have enough to last for a long time”.