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It may have initially led to anger, disgust, and even cries of hypocrisy, but Netflix’s move to crack down on password sharing is (literally) paying off.
What happened: Netflix gained 5.9 million subscribers last quarter (three times what analysts expected) as friends, family members, and exes around the world were bounced from accounts they had been sneakily logged into, forcing them to set up their own.
- Netflix ended password sharing in Canada back in February, and expanded the crackdown to 103 other countries and territories in May.
- It’s quite the comeback story from this same time last year, when Netflix reported a second straight quarter of subscriber losses for the first time in its history.
Why it matters: With Netflix looking victorious in its war against freeloading, it increasingly looks like crackdowns on password sharing will soon be standard practice for streamers.
Zoom out: Next on Netflix’s agenda: Boosting revenue, which narrowly missed company expectations. How? By driving signups to its ad-supported tier, which actually brings in more revenue per member than the costlier basic and standard tiers due to sweet, sweet ad dollars.
What’s next: To drive the adoption, Netflix scrapped its cheapest ad-free tier for new subscribers in the US and UK yesterday, a month after scrapping it in Canada.—QH