Netflix scraps cheap ad-free plans in a bid to lure users into an expensive deal
Netflix added nearly 6 million more subscribers in the spring as password-sharing crackdowns forced customers to shell out their own accounts.
The company gained 5.9 million paying customers in the second quarter of the year, bringing the total to 238.4 million. It was well above the 1.8 million additions forecast on Wall Street.
The extraordinary number of subscribers came after Netflix began cracking down on millions of subscribers who share their logins with friends and family. It is believed that a quarter of the 15 million Netflix subscribers in Britain share their password.
Netflix, which streams shows like Emily in Paris (pictured), said its basic plan, which was priced at £6.99 per month, would no longer be available to new or returning members.
Sophie Lund-Yates, principal equity analyst at Hargreaves Lansdown, said: “The crackdown on Netflix account swapping was an inconvenient hammer blow for those of us whose viewing was interrupted, but it has supercharged the streaming giant’s subscriber base.”
The sheer strength of Netflix’s appeal means millions chose to set up their own legitimate accounts where there were concerns the move would trigger a mass exodus.”
Netflix has also been rolling out its ad-supported option for viewers, which provides a cheaper subscription for cash-strapped consumers and a new revenue stream for Netflix through ads.
This costs £4.99 a month in the UK. Netflix said it had expanded its anti-sharing crackdown to more than 100 countries and, following the results, would extend the policy to its remaining territories.
The subscriber surge came as the company reported a profit for the three months to June of nearly £1.2bn, up from £1.1bn a year earlier, while revenue rose 2.7 per cent to £6.3bn.
The jump in subscribers will provide welcome relief for Netflix after it endured a rocky 2022, announcing its first drop in paying members in more than a decade in the first half of the year.
In the second quarter of last year, it lost nearly a million subscribers, sending shares into free fall and shattering Wall Street confidence.