Netflix experienced its largest surge in paying subscribers during the second quarter, adding 5.9 million new users, indicating that its efforts to combat password sharing are yielding positive results, new reports state.
The company disclosed this information in its earnings release on Wednesday and revealed that it now has a total of 238 million subscribers.
“In February, Netflix began its crackdown on password sharing, initially implementing restrictions in several Latin American countries, including Chile, Costa Rica, Peru, Argentina, the Dominican Republic, El Salvador, Guatemala, and Honduras.”
The policy was later extended to Canada, New Zealand, Portugal, and Spain, with plans to introduce it to users worldwide.
“The primary focus of this initiative is to address account sharing between households, as it hampers the company’s ability to invest in improving the platform for paying members and growing the business,” Netflix noted.
These efforts appear to be paying off, as evidenced by the impressive subscriber numbers.
In addition to the subscriber gains, Netflix reported $8.18 billion in revenues and an operating profit of $1.8 billion, which were generally in line with its projections.
The company says it expects revenue growth to accelerate in the second half of 2023, driven by the full benefits of paid sharing and continued steady growth in its ad-supported plan.
The ad-based subscription plan, called Basic with Ads, was launched in October of the previous year, priced at $6.99, lower than other subscription options.
This plan includes 15-30-second ads that play before and during shows and films.
Netflix aims to achieve a full-year 2023 operating margin of 18% to 20%.