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When Netflix first announced the password-sharing crackdown back in May, industry experts worried that this decision could hamper the streaming giant’s reputation and, in turn, affect its revenue. However, according to the second-quarter earnings report, it looks like Netflix’s gamble has paid off as it added 5.9 million subscribers worldwide, with 1.17 million new members from the United States and Canada alone from April to June.
As reported by the data analysis firm Antenna, Netflix’s decision to charge $7.99 per month for extra members proved fruitful, as they observed a healthy conversion rate of shared accounts into fully paying memberships. As a result, Netflix is planning to extend password-sharing enforcement to all other countries, making it essential for users to subscribe to individual plans or adhere to the new policy.
Another area that has proved instrumental in the company’s recent success is the ad-supported tier. Although it had a slow start, it has now become one of the bigger driving forces for the platform, boosting overall revenue by 3% year-over-year and garnering over 5 million new subscribers.
New subscription offerings
In addition to the password-sharing crackdown, Netflix has also made changes to its subscription offerings, which include the discontinuation of its ad-free Basic tier in the U.S. and U.K., and replacing it with new subscription tiers: Standard with Ads for $7 a month, Standard for $15.50 a month, and Premium for $20 a month.
Despite its recent triumphs, Netflix is not without challenges, as the report also highlighted the recent industry-wide writers and actors strike in the US, which has caused concerns about potential content shortages for streaming platforms like Netflix. However, Netflix’s co-chief executive, Ted Sarandos, stated that they remain optimistic and highlighted the fact that the platform boasts a diverse lineup of releases, including upcoming films and shows from around the world, positioning them to navigate through the strike with confidence.