Netflix's profits rise sharply after strict password measures are introduced
Kyiv • UNN
Netflix's earnings rose sharply in the first quarter of 2023 due to the password sharing ban, adding 9.3 million new subscribers to nearly 270 million, and the company will stop reporting key subscriber figures next year.
Streaming giant Netflix says its profits rose sharply in the first three months of this year, partly due to a stricter ban on password sharing, UNN reports citing the BBC.
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The streaming platform said that it added 9.3 million customers in the first quarter, bringing its total number of subscribers to nearly 270 million.
The company also reported that its first-quarter profit jumped to more than $2.3 billion.
But starting next year, the company will stop reporting basic subscriber figures.
Announcing the decision, the firm said in a letter to shareholders: "In the early days of our business, when we had little revenue and profit, the growth in membership was a strong indicator of our future potential.
The company added that today the number of subscribers has become "only one component of our growth" and asked investors to focus on its profits and revenues.
Its revenue for the first quarter increased by almost 15% year-on-year to $9.37 billion.
Some investors took the unexpected decision to stop reporting the number of subscribers as a sign that Netflix's wave of customer growth may be coming to an end.
Netflix shares have risen more than 30% since the beginning of this year, approaching the peak of 2021. However, after the announcement, they were almost 5% lower.
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The last time Netflix raised the price of its popular "standard" plan was in 2022.
The move was followed by an unusual drop in the number of subscribers, which spooked investors and heightened fears that Netflix was losing its dominance in the industry it founded.
Soon after, the company announced that it would resume growth by ending password sharing and launching a new plan that would be less expensive but with advertising.
The company is also making inroads in areas such as sports and video games, continuing to license material from rival media companies looking for ways to increase profits.
Analysts say the company has also benefited from its global presence, which has helped it maintain a relatively strong stream of new shows despite the strikes that hit Hollywood last year.
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Other tech giants such as Facebook's parent company Meta and social media platform X, formerly Twitter, have also stopped reporting monthly active users as growth has slowed, the publication noted.
