Netflix’s subscriber and earnings growth gather more momentum as password-sharing crackdown pays off

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Netflix’s subscriber and earnings growth accelerated in its latest quarter as the video streaming service benefits from a crackdown on freeloading viewers, an expansion into advertising, and an acclaimed programming lineup. The results announced in July painted a portrait of a company still gathering momentum after a jarring decrease in subscribers during the first half of 2022 prompted a change in direction. Netflix added 8 million subscribers during the April-June period, marking a 37% increase over the same time last year. It was the sixth consecutive quarter that Netflix’s subscriber gains have increased from the previous year, a trend triggered by the 2022 downturn that served as a wake-up call for the Los Gatos, California, company. As part of a shakeup that began in mid-2022, Netflix has been blocking the previously widespread practice of sharing subscriber passwords with friends and family living in other households. It also introduced commercials for the first time as part of a low-priced version of its service. But Netflix is bracing for the gains from the password-sharing crackdown to taper off, prodding the company to sharpen its focus on selling more ads for its low-priced option, which the company said ended June with a 34% increase in total subscribers from March. It didn’t detail precisely how many of its worldwide subscribers have chosen to watch ads for the cheaper price. The profit push also has made Netflix more judicious in its spending, resulting in fewer movies and TV series than the service has been making during most of the past decade. But the programming coming out of its pipeline is pleasing viewers and winning high praise—as demonstrated by the industry-leading 107 Emmy nominations Netflix received in July. Netflix’s strategic shift also has resulted in more marquee events streamed live, such as a recent roast of retired football star Tom Brady, a hot-dog eating showdown featuring renowned glutton Joey Chestnut, and two National Football League games on Christmas Day. Live shows that pull in huge audiences make it easier for Netflix to sell advertising and, ironically, “take us back to television’s roots,” Forrester Research analyst Mike Proulx said. This article was provided by The Associated Press.