In the last three months, Netflix has experienced remarkable growth in its subscriber base, adding 5.9 mn new subscribers, which is nearly three times the number analysts had expected, The Guardian reported. This surge in subscriptions came after the streaming giant implemented a crackdown on password-sharing households, which saw many users opting to pay for their own individual accounts. As a result, Netflix's global subscriber count has now reached an impressive 238 mn.
The latest quarterly results were unveiled amidst strikes from writers and actors, marking the first time both unions have simultaneously walked out since the 1960s. Co-chief executive Ted Sarandos expressed his disappointment with the strike and conveyed the company's hope to reach an agreement as soon as possible.
Despite the challenges in the industry, Netflix managed to achieve a profit of $1.8 bn on revenues of $8.3 bn during the quarter. Analysts had expected a more modest increase of around 2 mn new households, but the crackdown on password sharing proved to be a driving force behind the unexpected growth.
The strike over pay and the use of artificial intelligence (AI) is anticipated to have a significant impact on the industry in the coming months, affecting the release of new seasons of popular shows like House of the Dragon and The Last of Us, along with movies like Gladiator 2 and Mission: Impossible – Dead Reckoning Part Two.
However, despite the challenges faced by the entertainment industry, Netflix appears to be better positioned to weather the storm compared to traditional media peers. Although the company experienced a dip in subscribers last year, it has since regained its momentum and has been proactive in tackling password sharing to drive revenue growth. The company's move to introduce an ad-supported subscription also indicates its efforts to diversify income streams.
Deutsche Bank analysts have expressed optimism about Netflix's prospects, predicting that the increase in paid sharing will boost revenues through 2023. They highlighted Netflix's strength in its international audience, ability to generate hits from overseas, and a robust backlog of programming as factors contributing to its resilience.
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