Netflix: Profits soar after password sharing crackdown

  • By Mariko Oi and Natalie Sherman
  • BBC News

Legend, Sofía Vergara played Griselda Blanco in the six-part Netflix series

Netflix says its profits soared in the first three months of this year, thanks in part to a crackdown on password sharing.

The streaming giant said it added 9.3 million customers in the first quarter, bringing its total subscriber count to nearly 270 million.

The company also said its first-quarter profits jumped to more than $2.3 billion (£1.85 billion).

But the company will stop publishing key subscriber figures from next year.

Announcing the move, the company said in a letter to shareholders: “In our early days, when we had little revenue or profit, our membership growth was a strong indicator of our future potential.”

He adds that today, the number of subscribers is only one element of our growth, inviting investors to focus on its profits and revenues.

Its revenue for the first quarter increased nearly 15% year over year to $9.37 million.

The company also credited a “drumbeat” of success, such as the crime drama Griselda.

Some investors saw the unexpected decision to stop reporting subscriber numbers as a sign that Netflix’s wave of customer growth may be coming to an end.

Jamie Lumley of research firm Third Bridge wrote that the decision raises “questions about the prospects for growth of Netflix’s subscriber base.”

Other tech giants, such as Facebook parent Meta and social media platform X, formerly Twitter, have also stopped publishing monthly active user figures due to slowing growth.

Netflix shares were down nearly 5% after the announcement.

“Streaming is a notoriously volatile market, and holding on to customer dollars is an uphill climb,” said Sophie Lund-Yates, senior equity analyst at stock trading platform Hargreaves Lansdown.

“One area where Netflix has an advantage is its slate of original content, which is known to be a great retention tool compared to repurposed shows and movies.”

Netflix last increased the price of its popular “standard” plan in 2022.

The move was followed by an unusual drop in subscribers that surprised investors and intensified fears that Netflix was losing its dominance in the industry it had pioneered.

Shortly after, the company announced it would restart growth by cracking down on password sharing and launching a new plan that costs less but includes ads.

The company is also expanding into areas such as sports and video games, while continuing to license to rival media companies looking for ways to increase their profits.

Analysts said the company also benefited from its global presence, which allowed it to maintain a relatively strong pipeline of new shows, despite strikes that rocked Hollywood last year.

Netflix shares are up more than 30% since the start of this year, close to their 2021 high.

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Sara Adm

Aimant les mots, Sara Smith a commencé à écrire dès son plus jeune âge. En tant qu'éditeur en chef de son journal scolaire, il met en valeur ses compétences en racontant des récits impactants. Smith a ensuite étudié le journalisme à l'université Columbia, où il est diplômé en tête de sa classe.Après avoir étudié au New York Times, Sara décroche un poste de journaliste de nouvelles. Depuis dix ans, il a couvert des événements majeurs tels que les élections présidentielles et les catastrophes naturelles. Il a été acclamé pour sa capacité à créer des récits captivants qui capturent l'expérience humaine.
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