(San Francisco) The crackdown 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 Wednesday.
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.
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 plan or cancel your subscription,” reads a message to users.
Viewers in these two countries, like those in Canada, now have the choice between a formula with advertising (at $7 per month in the United States) and two more expensive subscriptions, without ads (15.5 and 20 dollars).
And they have to pay $8 more per additional user every month.
“Netflix will increase 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 looking to switch ‘parasitic’ users to its ad-supported formula.”
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 than subscribers).
“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 Wednesday.
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 closing of the New York Stock Exchange.
Analysts “fear that the platform will find itself short of content because of the strike in Hollywood,” notes Louis Navellier, chief investment officer of a consulting firm of the same name.
“But what matters at Netflix is user growth. And the password trick works. They turned the try,” he said.
Actors and screenwriters have gone on massive strike in the United States, causing the worst paralysis of the sector for more than 60 years.
On Friday, hundreds of them marched in front of a 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 regarding the use of so-called generative artificial intelligence, to prohibit the latter from creating scripts or cloning their voices and images.
“We had hoped that we would have reached an agreement at this point,” co-chief executive Ted Sarandos said during the analyst conference on Wednesday.
He mentioned that having grown up with an electrician and trade unionist father, he was aware of the “financial and emotional burden” that strikes place on families and said he was “certain that no union took this decision lightly. »
In April, he said that if the strike did happen, Netflix had enough “movies and shows from around the world [to] last for a long time.” »
