Netflix saw 5.9 million new subscribers in the second quarter of 2023, the first earnings period since the company cracked down on the sharing of passwords between multiple households.
The streaming giant achieved its projected $8.2 billion in Q2 revenue and surpassed its expected $1.6 billion in operating income, raking in $1.8 billion. Now up to 238.4 million global paid memberships, the report seems to back Netflix’s proclamation that its “paid sharing” initiative — which forces subscribers to either pay extra to allow people in other households to use their account or create a separate membership completely — is working.
In May, subscribers to Netflix’s Standard plan ($15.49 per month) and Premium tier ($19.99 per month) were given the option to pay an extra $7.99 per month for each person using their password in a different household. Those subscribed to the Basic plan ($9.99 per month with no ads) and Standard with Ads ($6.99 per month) were not given the option, instead forcing viewers logged into said accounts from a different location to sign up for their own memberships.
Despite online outrage at the change, Netflix told investors that “the cancel reaction was low” in its first quarter since limiting password sharing. “We’re seeing healthy conversion of borrower households into full paying Netflix memberships as well as the uptake of our extra member feature. We are revenue and paid membership positive vs. prior to the launch of paid sharing across every region in our latest launch,” the streamer said. Changes like these have allowed the company to turn a profit, while competitors like Disney, Paramount, NBCUniversal, and Warner Bros. Discovery struggle to do the same.
Speaking of that Basic tier, it’s no longer available for new Netflix subscribers in the US, UK, and Canada. While current members can remain on the plan, those looking to sign up for the streamer now can either opt for the $6.99 Standard with Ads plan, the $15.49 Standard plan, or the $19.99 Premium tier.
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