After years of intentionally ignoring and then making vague threats about users sharing passwords with friends and family, Netflix finally started making moves in 2023 to crack down on the terms-breaching act. After first setting social media ablaze with its initial announcement and rules for sharing, the streaming service started enforcing those guidelines in May, and execs were prepared for a backlash, with the hopes that everyone suddenly finding themselves without streaming capabilities would hop online to start their own accounts. And according to its latest financial report, that may well have been the case.
The entertainment company released its most recent quarterly earnings report, and revealed the somewhat shocking news that 5.89 million people started up new Netflix subscriptions from April-June 2023, which is a massive leap from what the expectations were for the period. What’s more, that total apparently doesn’t include those who are signed on as “Extra Members” through someone else’s account, and is in addition to whatever that total number of people would be.
Wall Street analysts wagered that Netflix would be adding somewhere around 1.769 million new members during Q2, which is 4.1 million lower than what Netflix reported. That’s a huge win for a company that only experienced its first dramatic subscriber loss in the first half of 2022, especially with the rise happening as password access was being limited across the board.
Compared to this same time span a year ago, Netflix’s current total of 238.39 million subscribers around the world marks an 8% growth year-over-year, surpassing the 232.5 million users it had in 2022. And low and behold, the company’s execs seems to have high hopes for this uptick to continue during the Q3 period. The letter sent to shareholders states:
We anticipate Q3’23 paid net adds will be similar to Q2’23 paid net additions.
That's a particularly bold claim, considering there presumably won't be any major changes to the site's infrastructure and user experience that would drive another swell of new/returning subs. Sure, July includes some returning hits like Sweet Magnolias and Too Hot to Handle, along with the premiere of Jamie Foxx's new movie They Cloned Tyrone, while August will bring out the live-action One Piece adaptation and Gal Gadot's new movie Heart of Stone, among other big Netflix TV premieres. But will those projects justify millions of new users?
What's more likely, perhaps, is that Netflix execs are banking on the ongoing strikes involving WGA writers and SAG-AFTRA actors continuing to disrupt the traditional flow of TV and movie productions and schedules. Without very many scripted series projected to be heading to broadcast and cable through the rest of the year, it's certainly possible that more and more people will rely on streaming services to catch up on things they failed to watch in the past, while also rewatching other faves.
On the flip side, Netflix also brought an end to its basic ad-free subscription tier, which will force customers to either opt for ads, or for paying more money for a higher-tier sub, regardless of if one needs 4K resolution or additional devices. Will that choice deflect or entice potential new customers as the summer rages on? We'll have to wait for the next financial report to come out in September.
