Netflix welcomed 5.9 million new subscribers in the second quarter of 2023, its first period of earnings since the company cracked down on password sharing between multiple households.
The streaming giant achieved its expected revenue of $8.2 billion in the second quarter and exceeded its expected operating income of $1.6 billion, bringing in $1.8 billion. Now at 238.4 million paid memberships globally, the report appears to support Netflix’s announcement that its “paid sharing” initiative — which forces subscribers to either pay extra to allow people in other households to use their account or create separate memberships entirely — is working.
In May, subscribers to the Netflix Standard ($15.49 per month) and Premium ($19.99 per month) plan were given the option to pay an additional $7.99 per month for each person who uses their password in a different home. Those subscribers to the Basic ($9.99 per month without ads) and Standard with Ads ($6.99 per month) plan were not given the option, instead forcing viewers to log into said accounts from a different site to sign up for their memberships.
Despite online outrage over the change, Netflix told investors that “cancellation reaction has been subdued” in the first quarter since limiting password sharing. “We’re seeing a healthy transition of borrowed households to fully paid Netflix memberships as well as uptake of our add-on member benefit. We’re revenue and paid membership positive vs. pre-launch paid sharing across every region in our latest launch,” said the streamer. Such changes allowed the company to turn a profit, while competitors such as Disney, Paramount, NBCUniversal, and Warner Bros. Discovery is struggling to do the same.
Speaking of that base tier, it is no longer available to new Netflix subscribers in the US, UK, and Canada. While existing members can stay on the plan, those looking to sign up for the streamer now can either choose the $6.99 Standard Plan with ads, the $15.49 Standard Plan, or the $19.99 Premium Level.