Netflix has surpassed analysts’ expectations on Wall Street with its subscriber growth, thanks to a number of successful strategies. One of the key factors driving this growth is Netflix’s crackdown on password sharing and the introduction of an ad-supported tier.
The ad-supported tier costs $6.99 per month, which is cheaper than adding a member outside of your household for $7.99 per month. This approach has been very successful in converting freeloaders into paid users, as evidenced by the surge in subscriptions.
Analyst Ross Benes noted that the unexpected growth in subscribers suggests that password sharing was more widespread than previously thought. Macquarie’s research estimates that nearly 100 million users share their passwords, providing a significant growth opportunity for Netflix. Additionally, the ad-supported tier recorded a 65% increase in subscribers quarter over quarter.
Netflix’s competitors are now following suit and implementing similar measures to reduce password sharing on their platforms. Disney+ is set to implement restrictions this summer, with a full crackdown scheduled for the fall. Warner Bros. Discovery will also begin limiting password sharing at its Max streaming service later this year. While Netflix’s competitors are adopting its successful strategies, the company remains well-positioned for further growth and success in the streaming industry.
