Netflix has become an integral part of our entertainment routine, offering a vast library of movies and TV shows at our fingertips. However, the practice of password sharing has raised concerns for both Netflix and its subscribers.
Netflix’s crackdown on secret password sharing is by all accounts paying off.
The streaming monster said on Wednesday that it added almost 6 million paid supporters in the three months to the furthest limit of June, carrying the all out to 238 million around the world.
After an extensive rollout earlier this year, the company said it has now launched its “Pay Sharing” feature, which is an attempt to force users to stop sharing their accounts with others for free in more than 100 countries. Netflix said revenue in these regions is higher than it was before the service launched, with “subscriptions already surpassing cancellations.”
Spencer Neumann, Netflix’s chief financial officer, in the company’s second-quarter earnings report called the payment distribution system implementation “the year’s biggest revenue driver.”
“An enormous piece of our income development this year was driven by an expansion in new paid memberships, principally through the presentation of shared installments,” he said.
The result comes at a critical time for Netflix, which is seeking to boost revenue by limiting password sharing and introducing ad-supported subscription options, as the Hollywood Writers’ and Actors Guild faces new challenges that could impact the future of original shows and movies.
Netflix CEO Ted Sarandos said of the day’s strike, “That’s not the outcome we want.”
Sarandos also said the company “distributes all kinds of content” when asked if Netflix might run out of original content if the actors’ and writers’ strike continues.
“The real goal is that we should end the strike so we can all push ahead,” he added.
Netflix’s cryptocurrency ban helped boost quarterly revenue, but still fell short of Wall Street analysts’ expectations. Netflix reported revenue of nearly $8.19 billion for the quarter, below Wall Street’s estimate of $8.3 billion. Net income was $1.49 billion, up 3% year-over-year.
“We’ve made steady progress this year, but there’s still work to be done to accelerate growth,” the company wrote in a letter to investors about its results. The company noted that subscriptions to its low-cost, ad-supported plan have doubled from the first three months of this year, but “current ad revenue is unrelated to Netflix.”
Netflix (NFLX) shares fell more than 4% after Wednesday’s close.
Netflix expected revenue for the quarter to reach $8.5 billion, up 7% from last year, but analysts failed to estimate $8.7 billion. The company added that the net profit paid out in the September quarter will be similar to the June quarter.