Variety reports that Netflix said that it signed up 5.89 million new paid subscribers during the second quarter – significantly more than the 1.8 million increase that had been projected by analysts.
The reason: Netflix’s new policy of reducing password sharing among its customers, which forced people to pay for their own accounts if they wanted to keep the service.
Netflix’s total global subscriber count now is 238.39 million, eight percent higher than it was during the same period a year ago.
According to Variety, “The company didn’t quantify how much of the subscriber gains were due to the password-sharing crackdown, but said sign-ups were already exceeding cancellations for the paid-sharing program.”
KC’s View:
Well, I got that one wrong. I thought that the Netflix change-of-policy would have the opposite impact, largely because as much as I like Netflix, increasingly I find that it is the service that, if I had to cancel one, probably would be the most disposable.
I will say that the new season of “The Lincoln Lawyer” has changed my mind on this, at least for the moment. But more on that later.
The other apparently smart move that Netflix made was to institute an ad-supported tier that would cost folks less money – this seemed to appeal to a lot of people. (Plus, it created a new revenue stream from advertising.) And, it now is eliminating its Basic plan, its cheapest streaming plan without ads, as a way of tightening things up.
In the end, I suppose that what really matters here is that Netflix has maintained its value proposition from a content perspective – people want to watch what it has to offer. I suspect that this trend will persist, especially as some of its competitors find their supply chains stressed by the actor and writer strikes that will reduce the amount of fresh content available in coming months.
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