Netflix’s crackdown against password sharing is starting to pay off.
The US tech giant reported a 5.9m rise in subscriptions in Europe. This was more than twice the analysts’ prediction of 2.07m and helped propel the company to record-breaking subscriber numbers.
Netflix has recently rolled out strict new rules that require customers to pay a fee to share their account.
First introduced in May, the move is intended to target the 100m households around world who are estimated to watch Netflix without paying.
This is an attempt to revitalize growth for the streaming service, after years of lax policies towards password sharing.
The “extra member’s” fee, which is priced at £4.99 (£4.99) in the UK, will likely drive more customers to Netflix’s ad funded tier.
Netflix has now 238.4m subscribers, up 8pc on a year earlier.
The company will benefit from the increase in subscribers, as it is currently experiencing a slowdown across the industry.
Last year, the maker of Squid Game and The Crown reported its first decline in subscribers in over a decade. This was due to fierce competition from competitors such as Disney+ or Amazon Prime.
Netflix has also reduced prices in over 30 countries to try to revive growth. They are acknowledging that the cost of living crisis is forcing consumers to tighten up their belts.
Netflix’s overall sales increased by 2.7pc, to $8.18bn (6.32bn PS), but this was below the forecast of $8.3bn for the three-month period ending June. Net profit increased by 10pc, to $1.44bn.
Netflix’s shares fell by over 7pc after-hours trading in response to the update.
Analysts and investors are closely watching how a wave of industrial action in Hollywood will impact Netflix.
The Writers Guild of America (WGA) and SAGAFTRA, the actors’ union, both walked out of the meeting for the first 60 years in a dispute over pay and AI.
The bosses said that they expect cashflow to be “lumpy” in the coming year due to the strikes. This shows the potential impact of these actions.
The strike has led to a production shutdown across Hollywood, and fears have been raised about a possible drought of blockbusters and television series.
Ted Sarandos has played down the impact that the walkouts had on Netflix. He said that the company’s “pretty robust schedule of releases” would help them weather the storm.
The deepest breath is a documentary that explores the world of dangerous freediving.
Reed Hastings, the founder of Netflix and CEO, stepped down from his position in January to become executive chairman. Greg Peters has been promoted to co-chief executive alongside Mr Sarandos.
In the past year, the company announced that it would be closing its mail-order service for DVDs. This was a 25-year old business.